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This page is graphically intense with long load times due to photos. However, the photos and narratives by the men who served at Osan Air Base makes the wait well worthwhile. The opinions expressed are those of the author and in no way represents any official statement of Osan AB or the USAF.
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 2007 :NORTH KOREAN EVENTSJanuary 2007DPRK Ideology and Personality Cult (Jan 2007) The Christian Science Monitor reported on 3 Jan 2007 that the extraordinary degree of cult worship in the DPRK is not well known, nor that programs promoting the ideology of Kim are growing. Government spending on Kim-family deification is the only category in the North's budget to increase even as defense, welfare, and bureaucracy spending has decreased, according to a new white paper by the Korea Institute for International Economic Policy in Seoul. Extra financing may come from recent budget offsets caused by the shutting down of older state funding categories, says Alexander Mansourov of the Asia Pacific Center for Security Studies in Honolulu.It has long been axiomatic that the main danger to the Kim regime is internal unrest. The DPRK is steadily updating its ideology to make it relevant. Kim broke away from orthodox communism, for example, in a program called "our style socialism." While Marxism-Leninism demands fealty to "nation," "party," and "serving the people" - Kim's "our style [Korean] socialism" does no such thing. It makes "family loyalty," with Kim at the head, the supreme good - a major deflection from communism. "Unlike the Stalin and Mao personality cults, there is a deification and a religious emotional element in the North," says former ROK foreign minister Han Sung Joo, who visited Pyongyang this past October, and in 1985. The DPRK uses "ideology rather than physical control" whenever possible, says Lee Jong Heon from Chung-Ang University in Seoul. "Military First is not aimed at building up the military, which is already quite built up and strong," says Lee, whose dissertation is titled, "A Political Economic Analysis of the North Korean Regime." "It is about replacing the old party - First Rice - structure of senior Kim. If the party is unwieldy, the military will control the people on behalf of the leader." Kim is not depending on the party, but a smaller more streamlined military apparatus. This is due to his politics as a result of the nuclear crisis brought by the Americans," says Haiksoon Paik, a DPRK specialist at the Sejong Institute outside Seoul. "North Korea's party has not been functioning as well as it is supposed to ... several positions in the Politburo have not been reappointed." DPRK Food Situation (Jan 2007) The Associated Press on 3 Jan reported that the DPRK claimed it had no serious trouble feeding its people despite heavy floods and sanctions by "enemy states" Japan and the United States. Quoting Kim Kyong-il of the DPRK Agricultural Ministry, the Chosun Sinbo says the problem of feeding the people is "in no way at a serious level". "Because of economic sanctions by enemy countries like the United States and Japan, there have been problems in a series of plans to modernise farming," the newspaper said. In the joint New Year editorial carried by state newspapers, the DPRK acknowledged its farms face difficulties. "We should, as in the past, keep up farming as the great foundation of the country and make an epoch-making advance in solving the problem of food for the people," it said. Much of the food shortfall has been made up with international aid in previous years, but the ROK - one of the largest single donors of food - suspended its food handouts last year. Even in a good year the DPRK does not produce enough grain to feed its people. But aid officials have said it is expected to face a severe shortage soon due to crop damage caused by the July floods and decreased food donations from abroad. No New Year Food Allotment (Jan 2007) Associated Press on 17 Jan reported that the DPRK skipped giving extra food rations to its people on New Year Day, except the elite citizens of Pyongyang. An ROK aid group suggests this indicates the country's food situation may be worsening. New Year Day is a major holiday in the DPRK and the authorities usually give special rations to its 23 million hunger-stricken population, but did not, said the Seoul-based Good Friends in its newsletter. The group does not say where it obtained the information. However, many of its previous reports of what was happening inside the isolated country have later been confirmed. China Reduces Food Aid by 53% while Oil Stays Flat (Jan 2007) Kyodo News on 25 Jan reported that the PRC, the DPRK's major food and fuel supplier, exported to its impoverished neighbor roughly half the amount of food in 2006 compared with a year earlier while shipping about the same amount of oil. Chinese customs figures showed that the PRC's exports of maize, rice and wheat flour to the country in the 12 months of 2006 totaled 207,250 tons, down 53 percent from a year earlier, according to the General Administration of Customs. Meanwhile, the PRC shipped 524,040 tons of oil to the energy-starved neighbor, up 0.2 percent from the previous year. The PRC does not reveal the amount of its food and fuel assistance to the DPRK, and analysts rely on export figures to assess the amount of aid Beijing gives Pyongyang. Scarlet Fever Outbreak (Jan 2007) Daily NK reported on 8 Jan that in Yanggan, Hamhung, Hamnam, Kangwon Coastal Cities, almost the entire Eastern Area has been struck by an epidemic of Scarlet Fever. Authorities prohibited travel restricting the activities of merchants, and daily lives are being severely impacted in December 2006. Authorities are currently taking steps to blockade those regions where Scarlet Fever has broken out. As Scarlet Fever spreads on the East Coast, railway stations in the large cities are blockaded and trains passing through do not open the doors to the platform. With antibiotics, Scarlet Fever is easily cured but with deficiencies in medical supplies, the North and Eastern parts of the country appear to be suffering greatly. The current situation in the DPRK is that of reduced subsistence brought on by floods of last summer, coupled with UN sanctions resulting from their nuclear test, as well as the end of most foreign aid. Market prices have now risen even further. Authorities are hoping that Scarlet Fever will disappear with the cold weather due in late December. Unification Ministry: No aid to North for Scarlet Fever, BUT... On 11 Jan, South Korea's unification minister said the government would not provide medical aid to North Korea to help stem the spread of scarlet fever in the communist country. "Scarlet fever is not a fatal infectious disease. Given the weight of the disease, we believe that North Korea itself will be able to solve the problem. There will be no aid regarding this matter," Lee Jae-joung said in a regular press briefing. (Source: However, Yonhap News Agency on 10 Jan reported that a ROK civic group said on 10 Jan that it provided medicine to the DPRK to help stem the spread of scarlet fever. "We shipped 36 types of medicines such as penicillin and antibiotics worth some 5 million US dollars," said Good Neighbours International, a civic organization which provides aid to the DPR Korea. In Dec 2006, when the outbreak was first reported, the Join Together Society, another humanitarian aid group in Seoul, shipped a total of 400,000 injectable doses of penicillin to the DPRK. Scarlet fever is intrinsically not a serious communicable disease, but if it is not treated properly it could become a serious one like cholera or typhoid. (SITE NOTE: Many activist groups are subsidized by the ROK government through the Unification Ministry. Thus the Unification Ministry's statement of not shipping drugs is a simply bit of sophistry. Good Neighbors International in Korea is situated in Mapo, Seoul.) In early Mar 2007, the Unification Ministry announced that it provided some 400 million won ($400,000) to help North Korea stem the spread of scarlet fever, not a serious communicable disease -- a major shift from its Jan 2007 position after the 13 Feb six-party agreement. Mysterious Disease? (Jan 2007) Ohmynews reported on 15 Jan a possible increase in a mysterious disease which frightened residents of the Yanggang region. Defector-refugees report the spread of a "rotten flesh disease" throughout the Northern provinces. The story was first reported by the NK Daily (July 27, 2006) which described the disease as an epidemic, but no one knows just how many victims it has claimed. Many DPRK residents believed that the disease originated from contaminated beef, sold in the Jangmadang markets. Apparently there was some truth to their suspicions. According to the NK Daily, the sale of beef and the movement of cattle in the region was banned or tightly controlled. Several veterinarian experts contacted suggested that it was anthrax, a naturally occurring disease among cattle and other hoofed mammals. But not all of the experts agreed. Both doctors were again in agreement when they observed that defectors and refugees "have a poor record of reliability in what they say and write. Exaggeration is the commonest characteristic." But not all possibly contaminated meat originated in DPRK or the PRC. In 2001 during the height of the bovine spongiform encephalopathy (mad cow disease) scare in Europe, famine-stricken DPRK agreed to accept some of the possibly contaminated beef from Germany and Switzerland. Epidemics Hit North Korea (Feb 2007) South Korea’s humanitarian aid groups stepped up the campaign to send medicines to a North Korean province believed to be plagued by epidemics. According to a source familiar with the North Korean situation, in Cheongjin County, North Hamgyeong Province, four major epidemics - scarlet fever, typhoid fever, paratyphoid, and typhus - have been spreading since late last year and as many as 4,000 people are infected. The spread of these illnesses has prompted some schools and companies to close and some of those infected have died due to a lack of medicine and food, the source said. The epidemics broke out mainly in men under 45 and then spread to children, the source said. To prevent a pandemic, North Korean authorities are banning people in the area from travel. Normally, scarlet fever and typhoid are easily contained with antibiotics. But North Koreans can be treated only if they obtain their own medicine, as hospitals are not equipped with the needed drugs, the source said. In addition, poor patients cannot buy the needed medicine because of its price. A recent report also said an epidemic had broken out in North Korea’s Gangwon Province, which borders South Korea’s province of the same name. Good Neighbors, a South Korea-based humanitarian aid group for North Korea, said typhoid and paratyphoid have broken out in Gangwon as well as South Hwanghae Province. North Korea’s health officials said they were also concerned by cholera outbreaks in some areas, the group said. Water contamination is believed to be the top reason for the spread of epidemics in North Korea. North Korea’s hydroelectric power generators have failed to produce power since last summer because a drought hit the country just after its dams were drained due to torrential flooding. This lack of electricity has made it difficult for the North Korean government to purify drinking water, forcing North Koreans to drink unsanitary water from rivers or mountains. While North Korean authorities have not officially announced the outbreak of these epidemics, South Korean aid groups are rushing to send medicine to North Korea. Sohn Jong-do, an official at a private humanitarian aid group, said, "The Korea Pharmaceutical Manufacturers Association and other groups have donated medicine, and we will soon send this to North Korea." (Source: Hankyoreh News.) North Korea Hit by Measles Epidemic (Feb-Mar 2007) BBC News reported on 20 Feb that the DPRK has been hit by a measles epidemic that has killed four people and infected some 3,000, the Red Cross has said. Pyongyang has requested five million doses of vaccine to fight the epidemic. Correspondents say medicine is in short supply and years of malnutrition have weakened resistance to disease. The United Nations Press reported on 14 Mar that the United Nations Children's Fund (UNICEF) and the UN World Health Organization (WHO) began a campaign to immunize 6 million DPRK children against measles, after the deadly disease broke out last November, affecting 3,500 people and killing two adults and two infants. North Korea Billed $2 Billion for Scrapped Nuclear Deal (Jan 2007) Reuters reported on 16 Jan that KEDO has demanded the DPRK pay almost $2 billion in compensation for a project to build two nuclear reactors that was scrapped after the United States accused Pyongyang of cheating on the deal. "The KEDO board calculated the amount of $1.89 billion and has made the demand to North Korea," a diplomatic source said by telephone on Tuesday on condition of anonymity. KEDO said the project was suspended because of the DPRK's failure to meet its commitments under the agreement, while the DPRK blames the United States for breaking the deal. The RO Korea had spent $1.1 billion on the project, the largest portion of the bill. Unification Ministry Transfers Projects to Red Cross (Jan 2007) Chosun Ilbo on 16 Jan reported that ROK Unification Minister Lee Jae-joung signed a memorandum of understanding with Han Wan-Sang, head of the Republic of Korea National Red Cross, that transfers to the aid organization some projects related to the DPRK, including separated-family meetings and fertilizer shipments. Under the agreement, the Ministry will hand over to the Korean Red Cross responsibility for arranging the meetings of separated families, providing financial support for the exchange of separated families, humanitarian supplies such as fertilizer, flood relief and the return to the DPRK bodies which have drifted south in floods. The agreement has provoked criticism from pundits who claim that the government is trying to open the way to help Pyongyang despite the North's nuclear test and expanding aid projects at the expense of government funds. "These projects were already being carried out by the Red Cross," an official in the unification ministry said, explaining that the agreement was simply making the practices official. "The government, including the Unification Ministry, will continue to handle North Korean issues such as policy-making, coordination with relevant departments and negotiations," the official said. (SITE NOTE: We agree that this is old news and the supposedly apolitical Korean Red Cross agency was really a tool of the Kim Dae-jung and Roh Moo-hyun administrations to deliver aid to the North. It is arguable whether some of the medical and humanitarian aid really went to the people who needed it as it was not monitored -- and whether some of the aid was more bribes to further the political agendas of the ROK progressive administrations. Also the ROK government allows "humanitarian aid" from NGO groups to continue unabated to the North.) Human Rights Violations: DPRK Contract Labor (Jan 2007) U.S. Department of State Press Release on 17 Jan 2007 reported that DPRK labor live and work under conditions so dire that this activity runs afoul of a UN protocol on trafficking in persons." The report, written by Jay Lefkovitz, U.S. special envoy for human rights in DPRK, criticizes Russia which provides the largest market for DPRK. In camps near Khabarovsk in Siberia, for instance, DPR Korean labor harvests Russian timber. This work force used to be populated by DPR Korean "prisoners and others viewed by the North Korean government as disloyal. It filled a labor gap in Siberia that coincided with the decline of the gulag. Today, conditions are so harsh in North Korea that workers actually volunteer for such labor assignments. However, because these workers are not paid directly, much of the capital generated ends up in the coffers of Mr. Kim's regime." There are approximately 10,000 to 15,000 DPR Koreans working abroad. Labor arrangements reportedly exist with entities in Russia, Czech Republic, Mongolia, Poland, Saudi Arabia, Libya and Angola. "Some argue that labor arrangements like those in Russia and Kaesong are positive developments. They see these activities as a way to open North Korean eyes to the outside world. To date, however, those benefits seem more theoretical than real," says Lefkovitz. (SITE NOTE: The use of North Korean laborers in Siberia is old news. In the past, those who tried to escape from these camps were tracked down by North Korean "death squads" and executed. The use of DPRK labor outside Korea surfaced in late 2006 when Lefkovitz focused on the Kaesong Industrial area use of North Koreans at what he claimed was substandard wages -- focusing on the ROK labor arrangements and transfer of funds. The unsubstantiated claim was that the money earned flows into the coffers of the Kim Jong-il to support his nuclear projects. The claims expanded on the use of North Koreans in former Soviet-block Europe as cheap labor.) "Gold Fever" Rampant in North Korea (Jan 2007) On 24 Jan, the Asia Times reported that "gold fever" is rampaging through the DPRK elite in the quest for relief from seemingly incurable economic malaise exacerbated by more than a year as a total outcast from the international financial community. Word from Pyongyang is that trading companies and even individuals are offering payments in gold for imports from across the border with the PRC and also in barter deals for products imported from elsewhere. Gold also has become a form of currency in the internal reward system of payoffs and bribes. It's well known that the US ban forced the BDA to impose a freeze on DPRK accounts totaling $24 million, but less well known that the bank also stopped purchasing gold produced by the DPRK's historic gold mines, in operation, sporadically, since the late 19th century. Output of the mines, in mountains about 160 kilometers north of Pyongyang, fell sharply in the late 1990s as a result of flood and famine but, with foreign expertise, has begun to pick up in the past few years. The impact of the ban, moreover, goes far beyond a single bank in Macau. Although the DPRK sold $38 million in gold and silver in Thailand last spring, Pyongyang has been frustrated in reviving its presence on the London bullion market, the world's largest marketplace for precious metals, amid increased US pressure on the large international banks that are the major buyers of gold. It was in the aftermath of the ban on the BDA that the DPRK's Chosun Central Bank submitted the information required by the London Bullion Markets Association (LBMA) for listing as a "good deliverer" of gold. The DPRK, from 1983 to 1993, had been in the LBMA's good graces, averaging a ton a month in sales to London buyers that included some of the world's leading banks, but had slipped off the list after failing to keep up deliveries. (SITE NOTE: In Jan 2007, it was reported that the DPRK elite continued to buy gold jewelry in China which seemed strange considering the on-going economic plight of the DPRK. This report of the use of gold as a medium for "bribes" would explain the practice. North Korea, in response to being blocked from using the international finance system, is now paying for illegal goods using precious metals. North Korea, like most police states, has to basically bribe its senior officials in order to assure their loyalty. In 2006, North Korea exported 38 million dollars worth of gold and silver to Thailand, to pay for luxuries (to keep the senior North Korean officials content) and weapons (and components for factories to build weapons, including nuclear and chemical ones. There is an estimated $40 billion in gold and silver still unmined. Mines are manned by conscript prisoner labor -- but these mines are expensive to operate even with the cheap labor. Pundits say the next phase in the war against North Koreas weapons and luxuries trade is to lean on those receiving, and laundering, the precious metals.) N. Korea Offers Debt Deal to Russia (Jan 2007) North Korea is said to have offered Russia the rights to develop its underground resources and to lend its ports for free in return for writing off debts worth $8 billion (approximately 7.44 trillion won). A Russian senior diplomatic official said on January 23, “North Korean officials met with Russian credit negotiators late last December to discuss giving the rights to develop the North’s mines and lending land in its ports for free.” North Korea’s accumulated debt to Russia has reached $8 billion, including principal and interest. The two countries are expected to deal with details about Pyongyang’s debts in March when they hold the North Korea-Russia Commission on Economic and Technological Cooperation. (Source: Donga Ilbo.) February 2007Dear Leader’s Exiled Son Surfaces in Macau (Feb 2007) A man presumed to be North Korean leader Kim Jong-il’s eldest son Kim Jong-nam appeared in Macau on 30 Jan, the Yomiuri Shimbun reported. A South Korean government official confirmed the report on 31 Jan. It seems Kim Jong-nam has not been allowed to return to North Korea and been wandering the globe for six years.Once heir apparent of the North Korean leader, Kim Jong-nam first grabbed international headlines when he was caught trying to enter Japan on a fake passport with his wife and son in May 2001. The reasons for his departure from North Korea are unclear. According to former high-ranking North Korean officials who defected, Kim junior was branded a traitor to the revolution by his father after he talked about a Chinese-style reform and opening policy at a private gathering in 2000. They say he was forced to leave the country over a power struggle with his stepmother Ko Young-hee, the mother of his younger half-brothers Jong-chul and Jung-woon. Since then, he has reportedly been staying in China. He was spotted at expensive restaurants in Beijing several times in January last year. Kim contacted an ethnic Chinese trader who was arrested on charges of espionage in South Korea in April 2006, a government official said. He gets along with members of the so-called Taizidang or princes’ club comprising children of prominent Chinese leaders like former president Jiang Zemin. Kim is said to have made money from a trade business, which he set up with the Taizidang group. He has shown interest in the IT sector since his Pyongyang days and now is in touch with IT experts he met when he visited Hong Kong and Macau to gather information. Despite being a stateless refugee, Kim does not appear restrained either socially or financially. Analysts say China does not treat him as an unwelcome guest. Kim Jong-nam tried to return to Pyongyang after his stepmother died in June 2004, but to no avail. Security strategy specialist Lee Ki-dong says anti-Kim Jong-nam forces remain strong in North Korea, adding the fact that Kim junior has not returned proves that the North’s succession structure remains unstable. (Source: Chosun Ilbo.) March 2007New Rationing System in NK Complicates Aid (Mar 2007) Unification Minister Lee Jae-joung said on 5 Mar that the South Korean government will send rice to North Korea around late May, leading to forecasts that food aid to the North will resume. It is worth taking a look at how food aid will be divided and to whom it will go to. Experts on North Korea say that the rationing economy is kaput, and that what little food aid the North receives ends up being divided among the authority – members of the Workers’ Party and the military.According to North Korean contacts, there have been many changes in the North’s rationing economy. These days, executives of the Workers’ Party might be left with no aid, while a laborer might end up with plenty. This phenomenon resulted from North Korea’s accelerating economic meltdown over the past few years and the end of equal distribution. Experts say that in the place of equal distribution is a new order that is ruled by those with authority. The The socialist rationing economy of the past used to be strictly based on the age and number of family members. Eight hundred grams would be rationed to laborers, 500 grams to students, and 300 grams to the elderly and feeble. The system still exists today, but it is not practiced. Timing and situation come into play these days. The rationing system differentiates farmers working in co-ops, farmers working in government-run farms, and military personnel. Co-op farmers receive food and money when the harvest is over. Though they received their share in bulk, their wages were not so different from what farmers working on government farms received. Farmers in the co-ops work in groups ranging from 10 to 20 members and are evaluated everyday by the group leaders. The annual salaries the farmers receive are based on these evaluations. This system does not motivate farmers to work harder, however. Purchasing power of money does not amount to much, and additional pay is not a motivation. Food is not correlated to the evaluation, so it does not motivate farmers either. Laborers in the city and government-run farms as well as Workers’ Party members receive rations based on days worked. Their rations are cut if they do not show up for work. Military personnel received a fixed salary. The old rationing system started crumbling in the mid 1990s. Till then, the national food board collected grain from the co-op farms to distribute to laborers and the military. If it was not enough, the North’s food agency imported grain. The amount of grain collected waned each year. One reason for this was because farmers who experienced major famines doled away food for themselves and worked on their own private farms. The North Korean government was too busy idolizing Kim Jong Il and his father Kim Il Sung to import grain for its citizens. The co-op farms that evaluated its farmers emerged after the economic reform of July 1, 2002. The reform was aimed at motivating the farmers to work harder. Still, there was not enough food to go around. The national food board supplied the military and the defense industry with food while it neglected others. Soldiers did not receive the 850-gram standard, and some suffered from malnutrition. This is what made the military, the defense industry, exporting departments in the Workers’ Party, and other strategic industries to argue their importance and pressure the national food board. This is what gave way and led to the current ration system based on power. This system still exists today, although the food supply has improved after the turn of the millennium. When food supplies from abroad make it to the ports, government organizations with authority such as the military intercept them right away. To deceive the international society, military vehicles have fake license plates for the ordeal. After the military takes its share, other organizations next up in the food chain take their share. The organizations with the least power are provincial governments. Even the Workers’ Party executives of provinces cannot receive rations without being rewarded its share from above. On Kim Jong Il’s birthday on February 16, citizens of Pyongyang received a month’s worth of ration, but citizens of provincial areas received nothing. Coal miners in the countryside sometimes receive enough rations to feed the whole family. This is because entities that own the coal mines are part of the Workers’ party that boasts a big share of exports. Experts say that in order for all citizens to receive some of the aid, food supplies should be sent to the North in one transaction so more citizens have a chance of receiving some aid. Select few organizations hog the supply if given little by little, but provincial areas have a chance to receive aid if the country receive one big food supply. If citizens receive rations, they save money spent on food. But the rations keep them away from private businesses, because they have to go to work for the rations. The average monthly salary of North Korean workers only amounts to three kilograms of rice. This is why another family member must run a business to afford other basic goods. This is also why most workers cannot depend on rations. The only organizations that can look to the rations regularly are the military and military-related organizations. It also depends on the amount of foreign aid the government receives. The citizens have to purchase the rest by themselves. North Korean citizens prefer running their own business to receiving a ration, because businesses yield more money. The worst off are those who have no choice but to show up for work every single day, while they only receive rations several times a year. The government these days orders its citizens to come to work, citing that it is doling out more rations. This has lead to the deterioration of the living standards of the citizens because it leaves less people running their own businesses. Executives of the Workers’ Party have enough money to buy rice and basic goods because they receive kickbacks. Some executives receive both rations and kickbacks. Aid to the North does not necessarily benefit its people because of all these very complicated matters. (Source: Donga Ilbo.) N. Korea demands 300,000 tons of fertilizer in aid (Mar 2007) North Korea on Wednesday asked for 300,000 tons of fertilizer in aid, the Unification Ministry said, days after the two Koreas agreed to resume humanitarian projects. "Chang Chae-on, president of the North's Red Cross, sent a fax message to his South Korean counterpart Han Wan-sang demanding 300,000 tons of fertilizer and wanting to know how much in what type," said Yang Chang-seok, a spokesman for the ministry. Yang said the two sides will work out the details for the shipment, saying it will be sent to the communist country in late March or early April. "It usually takes about one month to ship 100,000 tons of fertilizer to the North, and fertilizer costs about 360,000 won (US$360) a ton," Yang said. He estimated the amount of money for the aid at 100 billion won. (SITE NOTE: The world is watching as the ROK is resuming its aid to the North without any progress on the denuclearization of the North.) "The government earmarked 108 billion won for that purpose this year." Last week, the two Koreas held the first ministerial meeting in seven months and agreed to put inter-Korean projects back on track. But they made no direct mention of when to resume fertilizer and rice aid in a joint statement. South Korean officials had said Red Cross officials will discuss resuming fertilizer aid, while the resumption of rice aid will be tackled at a new round of economic talks to be held in Pyongyang on April 18-21. Unification Minister Lee Jae-joung, South Korea's point man on North Korea, said North Korea requested 400,000 tons of rice and 300,000 tons of fertilizer in aid for this year during the Cabinet-level meeting. Since the historic inter-Korean summit between then South Korean President Kim Dae-jung and North Korean leader Kim Jong-il, South Korea has given North Korea about 500,000 tons of rice and some 350,000 tons of fertilizer on average annually. (Source: Hankyoreh News.) ROK Ships Fertilizer (Mar 2007) South Korea sent 6,500 tons of fertilizer to the North on March 27, the first shipment of a total of 300,000 tons to be delivered this year and the first since government aid shipments were suspended in July last year, owing to the missile test. NK Diplomats Ordered to Send Kids Home (Mar 2007) North Korean diplomats and those who work at overseas branches of state-run trading companies have been ordered to send their children home except for one child by the end of this month. The order was issued on Feb. 14, after a one-month-and-a-half notice. In the early 1990s, the North ordered its students abroad to return home during the collapse of the Soviet Union and the breakdown of the Berlin Wall. But this was the first time for Pyongyang to call home the children of diplomats and officials at trading companies. The measure is a revival of a decades-old regulation, which has been temporarily suspended since 2002. The ban was lifted in 2002 to help more children pick up foreign language skills in a more advanced educational system. The North has decided to return to its previous policy to prevent possible mass defection of its diplomats and white collar workers abroad with their families in the reconciliatory mood, including the ongoing efforts to normalize the diplomatic ties between Pyongyang and Washington, experts on North Korean affairs said. Neither primary school students nor college students, however, are allowed to stay overseas. ``Diplomats and workers at state-run trading companies are allowed to keep only one child, who is old enough to attend either junior high or high school, but primary school children and college students are banned from staying overseas,’’ Hong Soon-kyung, a North Korean defector, told The Korea Times. A former senior North Korean diplomat, Hong serves as chairman of an association of North Korean defectors in Seoul. Hong said it was because the Stalinist state does not want its young generation to be influenced, or brainwashed, by U.S.-style market economy. He said North Korean college students are allowed to study only in China, the North’s closest ally. ``Those North Koreans who go overseas for physical labor have not been allowed to bring any child, not even one,’’ he added. Under the order, some 3,000 North Korean children in some 50 countries will have to return home, sources said. Defections by North Korean diplomats or their families are rarely publicized, but government officials say they are not unprecedented. South Korea usually maintains a tight lid on defection cases involving ranking North Korean officials out of fear they may provoke the communist nation, thus making future defections by others more difficult. (Source: Korea TImes.) North Korean diplomats resist order to send children back home (Apr 2007) An order from Pyongyang directing North Korean diplomats in overseas posts to send their children back home has been met with defiance, sources in Beijing said yesterday. Pyongyang has extended the deadline for sending the children home until the end of this month in the face of the diplomats’ reluctance to obey. On March 6, the JoongAng Ilbo reported that the communist Workers’ Party of North Korea had issued the order in February, but no explanation was provided. Under the order, children over the age of five were to go back to the North by the end of March. [Source: Joongang Ilbo.] Kommersant (Russia) on 5 Apr reported that DPRK diplomats working abroad were ordered to send their children back to Pyongyang by the end of March, leaving only one child living with them, and only if that child is between the ages of 11 and 13. Of the 3000-4000 children awaited in Pyongyang, only tens arrived. The ROK press was the first to report on the diplomats' unprecedented disobedience. Not a single child returned from the PRC. A DPRK deputy foreign minister was even dispatched to Beijing to impose order. Parents objected that the move would disrupt their children's educations. Another parent said that there was not enough time to prepare. The deadline for the return of the children to the homeland was extended by one month. Outbreak in Pyeongyang of Hoof-and-Mouth Disease (Mar 2007) Associated Press reported on 8 Mar that the DPRK already suffering food shortages, has slaughtered hundreds of cows and pigs after an outbreak of foot and mouth disease. According to the World Organization for Animal Health, the outbreak occurred in January at a farm in the capital, Pyongyang, sickening 431 cows. The DPRK issued a report that was posted on the Web site of the Paris-based animal health agency, known by the initials OIE. The DPRK's Agricultural Ministry said some 100,000 animals within the 44-mile radius of the outbreak site will be vaccinated. Since the outbreak, quarantine officials have killed 466 cows, including the sickened ones, as well as 2,630 pigs to prevent the spread of the disease, the North's Agricultural Ministry said. Since the outbreak, quarantine officials have killed 466 cows, including the sickened ones, as well as 2,630 pigs to prevent the spread of the disease, the North's Agricultural Ministry said. The sickened cows were imported from Tieling, China, the report said. The last outbreak of hoof-and-mouth disease in North Korea occurred in 1960, the report said. The disease is not known to be a threat to humans, but it is highly contagious among other mammals. The disease affects cows, sheep, goats and other cloven-footed animals, causing blisters on the mouth and feet. ROK Send Aid for Outbreak (Mar 2007) Unification Minister Lee Jae-joung said on 15 Mar that South Korea would provide North Korea with quarantine equipment to help combat an outbreak of a foot-and-mouth disease. ``On Wednesday, the North asked us to send quarantine equipment while informing us of the current situation regarding the outbreak,’’ he told reporters. Foot-and-mouth disease is a highly contagious and sometimes fatal viral disease of cattle and pigs. Lee said the North has culled more than 2,600 cows and 400 pigs since the outbreak in a farm adjacent to Pyongyang in January. Outbreak Under Control (Apr 2007) Associated Press reported on 4 Apr that the U.N. said that foot and mouth cattle epidemic in the DPRK was under control and added that virus would not spread further. The disease was brought into the country through a shipment of live animals and the outbreak started in January at a farm near the capital, Pyongyang, the U.N. Food and Agriculture Organization said after the return of a one-week mission to the DPRK. Seoul to Give N.Korea W400 Million in Cash (Mar 2007) On 12 Mar it was reported that South Korea for the first time in history officially decided to give cash to North Korea, in the amount of W400 million (US$1=W945). Some people simply put two-and-two together about Lee's trip which they said beforehand was to set up a meeting between Roh and Kim Jong-il. In 2000, the South Korean government secretly remitted about $500 million to Pyongyang prior to the first inter-Korean summit, but this will be the first time for Seoul to give Pyongyang money under an agreement reached in broad daylight. (SITE NOTE: This in our view should be considered the last straw for an administration that has flagrantly abused its powers -- treating the Korean people as fools -- and is determined to transfer as much money and free "humanitarian aid" (in lump-sum quantities) as possible to the North BEFORE Roh Moo-hyun's term expires. However, by the same token, we question what the GNP is doing about this travesty -- instead of simply playing politics in order to get elected. The North has not made one verifiable act of fulfilling its part of the nuclear disarmament bargain, and the South is already "rewarding" it -- under the guise of humanitarian aid. We believe the Korean people -- through its politicians -- need to stand up and say "no" -- IMMEDIATELY. The Unification Ministry has already agreed to a massive $300,000 million in "humanitarian" rice/fertilizer aid -- not counting its offering to give the North the immediate 50,000 barrels of crude oil from its coffers under the six-party agreement. The people should rise up and say "enough" -- instead of being side-tracked by the FTA issue over which they have no control."We've decided to supply North Korea with building materials worth about W3.5 billion for the construction of a family reunion center equipped with video facilities. Among the expenses, we agreed to give Pyongyang about W400 million in cash," a South Korean government official said Sunday. The reason, he said, is that some materials including LCD monitors needed for the video facilities are banned for export to North Korea under the U.S. Export Administration Regulations, which prohibit exports of goods containing more than 10 percent of American components or technology to states sponsoring terrorism. (SITE NOTE: This Reunion Center has been an endless money pit since its inception. First it was the lost materials for the roads that had to be replaced. Then it was the supposed botched runway where the materials again had to be replaced and they added even more materials for the road. Then it was more money blackmailed to the past reunions. In our opinion, the Korean people are being openly swindled by the Unification Ministry -- all in the name of national reunification. This ploy of extorting money over the emotional family reunion theme -- that the North censors and controls like a staged act to gain the most emotional mileage from it.Not all government officials are happy that Seoul decided to give cash to Pyongyang although there are ways to ask Washington to lift the ban on some items. Another South Korean government official said, "In a similar case, we used to discuss it with the U.S. when we sent strategic goods" to the inter-Korean Kaesong Industrial Complex in the North. A Unification Ministry said, "We attach importance to the humanitarian aspect. We also agreed with the North that we can check how it purchases and uses those materials, so there'll be no suspicion about the possibility of those materials being diverted for other purposes." The official hinted Seoul decided to send cash to expedite family reunions via video link. "In case of the Kaesong Industrial Complex, there was no problem because the end users of the goods are South Korean enterprises. But this case is somewhat different. If we had negotiated with the U.S., it would have taken considerable time or we would have had difficulty reaching an agreement" with Washington. (SITE NOTE: The Unification Ministry's statement that "we can check how it purchases and uses those materials" is the most ludicrous statement around. If it has never checked its aid -- and even actively sought NOT to check "humanitarian aid" before -- what makes one think they will do it now.)Meanwhile, the Red Cross organizations of the two Koreas agreed to resume building the family reunion center at Mt.Kumgang, suspended last July, on March 21. The responsibility was transferred to the Red Cross in Jan 2007 to arrange the meetings, but we are uncertain how the Unification Ministry bypassed the agreement to fund the project. (Source: Chosun Ilbo.) N.Korea Asks S.Korean Firms in Kaesong to Pay Up (Mar 2007) North Korea is demanding unpaid residence fees from South Koreans working in the inter-Korean Kaesong Industrial Complex in the border city of Kaesong. A South Korean government official on Sunday said North and South failed to settle their differences over the demand. According to an agreement between the two Koreas, South Koreans have to register and pay fees to North Korea whenever they extend their stay or change their residence. But no South Korean workers in the industrial park have paid since no specific rules were set. Details of the amount the North wants or the length of the permitted stay have not been revealed. A South Korean official merely said there was “a big gap” between the two sides. One South Korean company said it could not operate a factory in the industrial complex if it paid what the North is demanding. (SITE NOTE: If this is true, the whole concept of the Kaesong Industrial area is a shame. There may be cheap labor from North Korea -- but only if the North Koreans run the operations. In other words, it would reinvent the UNDP situation. Currently, about 800 South Korean residents live at the complex, where South Korean businesses use cheap North Korean labor to produce goods. Some 21 South Korean factories employ about 11,160 North Korean workers there.) It is unclear why Pyongyang is suddenly asking for the money two years after the launch of the joint project. A fellow with a state-run think tank said the North was looking for extra income as the number of South Koreans working or staying in the industrial park has increased but made an unreasonable demand. Some 800 South Koreans work in Kaesong. The government is telling Pyongyang it will be difficult to lure more South Korean companies to the industrial park unless the North backs off. A source acquainted with North Korean affairs said Pyongyang expects Seoul will use money from the inter-Korean cooperation fund to pay the fees if the North keeps up the pressure on the companies. (SITE NOTE: We question the legality of using government funds to support the interests of private companies.) (Source: Chosun Ilbo.) North Boycotts Six-party Talks over Release of Funds (Mar 2007) The DPRK was still boycotting the six-party talks because its funds were being held up for a multitude of reasons. For one, a DPRK bank that does NOT want its $7 million in funds released to the DPRK. The New York Times reported on 27 Mar that a largely foreign-owned DPRK bank has emerged as a major obstacle to a deal that would allow six-party negotiations over the DPRK's nuclear program to move forward. A representative of the Daedong Credit Bank, which has about $7 million frozen in Banco Delta Asia, has told the authorities in Macao, though, that it will not accept its funds being placed under the control of the DPRK or moved to the Bank of China. For the second, officials working with the DPRK point to a major impediment: Pyongyang's unfamiliarity with modern financial rules. DPRK authorities have been reluctant to provide official authorization from 50 account holders approving the release of their funds to a branch of the Bank of China. Finally, the US has tried to solve the impasse over the funds frozen in the Macao bank, Banco Delta Asia, by offering to have the money placed in an account in the Bank of China under the control of the DPRK on the understanding that it would be spent for humanitarian purposes. U.S. officials said, concerns how the money will be used, as the Bush administration has demanded that the $25 million be placed into an account supporting humanitarian projects -- not military ones -- inside the DPRK. The DPRK has refused to accept this demand. This stipulation has caused the Bank of China to refuse the funds for fear that its will be tainted by accepting "illicit funds." Chinese authorities have been seeking assurances, say U.S. officials, that they won't be held accountable "for any future liability" by receiving the Banco Delta Asia money. A side issue is that pundits have stated that South Korea saw the BDA decision as vindicating its policy of overlooking Pyongyang's criminal activities and human-rights violations in the broader interests of improving relations with the North Korean regime. Seoul felt less constrained in resuming its largely unconditional provision of aid to the North, which was halted after Pyongyang's 2006 long-range missile launch and nuclear test. Fertilizer Aid from ROK Resumes (Mar 2007) The Associated Press reported on 27 Mar that the ROK resumed official economic assistance to the DPRK on Tuesday sending a shipload of fertilizer to the impoverished nation. A Vietnamese-registered cargo ship left the southwestern port of Yeosu for the DPRK carrying 6,500 tons of composite fertilizer -- the first batch of a 300,000-ton shipment, said Kim Nam-sik, a spokesman for the Unification Ministry. Despite the fertilizer aid, the ROK plans to hold off on resuming rice shipments until after mid-April to make sure the DPRK carries out its promise to close the nuclear reactor. (SITE NOTE: The ROK halted shipments because of the nuclear test, but has resumed the aid despite the fact that the DPRK still has not completed even the first step of the 13 Feb 2007 agreement to shut down their reactors and allow IAEA inspectors in.) S.Korea Resumes Aid Shipments to N.Korea (Mar 2007) South Korean aid shipments to North Korea resumed in full swing after video reunions of separated families began on Tuesday. The government sent 60,000 blankets to North Korea on Wednesday. The shipment of blankets, part of a flood relief campaign, was halted after Pyongyang conducted a nuclear test last October.  Fertilizer Aid to North (31 Mar 2007) (Hankyoreh News) The shipment also included 11 other relief items including disinfectants for the prevention of foot-and-mouth disease. Some 15,000 tons of rice and 70,000 tons of cement will go north next month. A ship carrying 6,500 tons of fertilizer left Yeosu port for North Korea on Wednesday, part of 300,000 tons of fertilizer due to be sent to the North by late June. The provision of fertilizer will cost W108 billion (US$1=W939) including freight fees. North Korea asked the South Korean Red Cross to offer fertilizer aid on March 7. The government will provide North Korea with some W3.5 billion of materials and W400 million in cash for the construction of a family reunion center equipped with video facilities. Originally the South was supposed to provide LCD monitors for the center, but the U.S. has banned shipments of LCD monitors to North Korea, so the cash will go to buying LCD monitors from China. The two sides will discuss when and how 400,000 tons of rice worth W200 billion will be sent across the border at a meeting of the Inter-Korean Economic Cooperation Committee which will open in Pyongyang on April 18. (Source: Chosun Ilbo.) Concern over DPRK Food Shortages (Mar 2007) A South Korean aid group has raised fresh concerns over malnutrition in its impoverished neighbour. Seven out of 10 North Koreans are presumed to have run out of food, the Seoul-based Good Friends group said on 21 Mar in a regular newsletter. The aid agency said there were concerns among midlevel North Korean officials that residents in cities not receiving regular wages or rations and without arable land could starve to death; it said some farmers had run out of food since last month. The group declined to say where it had obtained the information, but many of its previous reports on North Korea have been found to be accurate. Food shortages have been exacerbated as a result of floods last summer and South Korea's suspension of food aid in protest at the North's missile tests in July, according to Human Rights Watch. (Source: The Guardian.) DPRK Confirms Food Shortage (Mar 2007) A senior North Korean official has admitted there is a severe food shortage in the communist country, saying it is currently short of some 1 million tons, the Voice of America reported on 28 Mar. In a meeting with visiting officials from the U.N. World Food Programme (WFP), an unidentified North Korean vice agriculture minister expressed his country's willingness to receive food aid from the outside world. Reuters reported on 28 Mar that the World Food Program appealed to donors to separate nuclear diplomacy from humanitarian needs and step up assistance to the DPRK to stop millions of people from going hungry. The DPRK is facing a food gap of 1 million tons, or about 20 percent of its needs, of which the U.N. agency can only fill a fraction because of a huge drop in donations over the past two years as tensions surrounding the peninsula rose. Banbury said progress in the talks among the six parties should not influence humanitarian assistance. Banbury also said that although bilateral aid helps, there is little guarantee that it reaches the most vulnerable, and it also reduced the WFP's ability to negotiate with the DPRK to ensure access and monitoring for its assistance. (SITE NOTE: The DPRK may find it difficult to receive aid from the WFP as donations from countries dried up after its nuclear tests -- and after it kicked out the WFP officials. The current WFP position is "no monitoring -- no food." The reference to "bilateral aid" is a condemnation of the ROK which aims to send unmonitored rice in April -- if the goals of the 13 Feb six-party agreemetn are met. Thus the WFP faults the ROK for the reduction in its food donations as the countries demand that their aid donations be monitored.Jean-Pierre DeMargerie, head of the WFP office in North Korea, said that the situation is not as bad as it was in the 1990s, when about one million North Koreans are estimated to have died of hunger, but the food situation has again "started to deteriorate because of June and August flooding of critical cropland and major reductions in WFP and bilateral food assistance." "The WFP is ready to increase help to the people of the DPRK, but we urgently need significant donor contributions to do so," he said in a press conference held at a hotel in downtown Seoul. (Source: Yonhap News.) WFP Falls Short (Apr 2007) The U.N. World Food Program (WFP) has only been able to gather one-fifth of the amount of recovery aid it is seeking for North Korea, with less than a year left in the aid program, according to the agency's tally on 15 Apr. A resourcing update for North Korea dated 12 Apr showed the WFP received donations totaling just short of US$21 million, accounting for 20.53 percent of the aimed $102 million. The donations include $3.2 million carried over from previous operations. (Source: Yonhap News.) NK relief donations differ in meeting targeted amount (Dec 2007) International contributions for emergency flood relief in North Korea have successfully reached the targeted amount, but those for other recovery efforts have barely met the half-way mark, according to an update 28 Dec by the U.N. World Food Program (WFP). The WFP received 99.3 percent of some US$5 million it sought for emergency assistance to flood-affected areas in North Korea, a project that began in August. Australia was the largest donor, accounting for 31 percent of the total. England's contribution accounted for 20 percent. Other major donors included the European Union, the United Nations, Canada and Finland. But the other ongoing donation drive, the protracted relief and recovery operation, began in April 2006 but has barely surpassed the 50 percent mark, according to the update. As of 28 Dec, the WFP received 52.9 percent of the targeted $102 million with five months left in the program's duration. South Korea is the largest donor in this category, with $19.7 million, or 19.3 percent of the total collected. Russia is next with $8 million, or 7.8 percent of the total, followed by Switzerland who accounted for 5.4 percent. (Source: Yonhap News.) April 2007China Exports No Oil to N. Korea for 2nd Straight Month in March (Apr 2007) On 23 Apr Kyodo reported that the PRC did not export any oil to its impoverished neighbor for the second straight month in March. The zero shipment in March put the total of China's crude oil exports to the country in the first three months of this year at 52,089.93 tons, down 48.4 percent from a year earlier, the General Administration of Customs said. Whether this development is linked in any way to six-party talks is unclear.Seoul Agrees no-Strings Rice Aid to North (Apr 2007) South Korea has agreed to send 400,000 tons of rice worth W108 billion (US$1=W928) including transport costs to North Korea starting late May. The agreement came in the 13th Inter-Korean Economic Cooperation Promotion Committee talks concluded in Pyongyang on 22 Apr, where the two also agreed on a trial run of two cross-border railways on May 17. Seoul apparently backed down over making the rice aid conditional on denuclearization efforts. "We made it clear to North Korea that unless the Feb. 13 agreement is implemented as scheduled, it is difficult to get approval for the rice aid from the National Assembly," chief South Korean negotiator Chin dong-soo said, adding implementation of the six-nation denuclearization agreement "is the key." But the matter was not included in the text of the agreement due to the opposition from the North. It therefore seems likely Seoul will have to send the rice even if the North fails to shut down its nuclear facilities. In a separate letter of agreement on food aid, the two Koreas said, "The first shipment shall leave port in late May 2007." The North Korean delegates walked out of the conference room last Thursday, when the South Korean delegation urged North Korea in its keynote speech to implement the Feb. 13 agreement. On the cross-border railways, the two Koreas already reached a detailed agreement for a trial run of the Gyeongui and Donghae lines, which were shelved only a day before the scheduled trial run, apparently due to reluctance of the North Korean military to guarantee safe passage. Sunday's agreement does not mention this either, saying only, "The two sides shall cooperate so that military guarantees are implemented before the trial run of trains." Whether the North Korean military had changed its position is unclear. The two Koreas have agreed three times to conduct a trial run of the Donghae and Geongui lines since 2004, but they floundered each time on last-minute resistance from the North Korean military. The two also agreed to launch a project of cooperation in light industry and underground resources development in June conditional on the trial run. South Korea would provide the North with light-industry materials and Pyongyang will give South Korea the right to develop underground resources. (Source: Chosun Ilbo.) (SITE NOTE: This agreement was between governments, but the key player was not involved -- the DPRK military. North and South Korea agreed to conduct test-runs on two inter-Korean railways -- the Gyeongui railway in the west and Donghae railway in the east -- in May. The military blocked the tests claiming military secrets were involved. That has NOT been resolved so this is simply another propaganda ploy to gain the peoples' approval of the rice aid BEFORE the North has denuclearized -- and then feel free to blame the DPRK military for its failure AFTER the concrete, rice and fertilizer aid has all been off-loaded in the North. In the past the ROK has used unsubstantiated reports from NGO groups who would not provide their sources, to ship unmonitored "humanitarian" aid to North. This was simply another contrived excuse to continue the food shipments. The UN World Food Program has fallen short of its donations goal indicating that the world's nations aren't going to play the DPRK game of food shipments without monitoring. Even worse are the implications that the ROK is undermining the six-party agreement by providing aid without any actions to dismantle the nuclear facilities. The ROK has only stated that the North was "serious" about doing so, but there has been no action since the DPRK will not pick up the money from the Banco Delta Asia (BDA). Thus the ROK has undermined the bargaining pressure being exerted by the US. To view the Roh administration as an open supporter of the DPRK is obvious -- to view it as an ally is dubious with all the dire implications. A Chosun Ilbo editorial stated, "This administration wasted W3.6 billion (US$1=W928) in taxpayers' money on an oil tanker contract and heavy oil storage, just because it couldn't wait and see whether the North was abiding by the agreement before rushing to provide the 50,000 tons of heavy oil in reward. What kind of an agreement were we expecting in a relationship where South Korea is invariably pushed around by North Korea? And how can we trust any agreement we make?") May 2007DPRK asks for insecticides (May 2007) South and North Korea will hold talks to discuss Seoul's provision of insecticides to Pyongyang. North Korea made the request for medical aid in early April, and working-level dialogue will be held in the North Korean border city of Kaesong. Approximately $1.5 million worth of anti-malaria drugs and netting was shipped to the North in April. (SITE NOTE: These anti-malarial drugs were supposed to benefit the populace along the DMZ the most -- but skeptics such as ourselves wonder if the DPRK soldiers along the DMZ qualify as "populace." In a "military first" regime, they get first picks of the ROK giveaways. The shipment was sent within a week of the request.)S. Korea to complete shipments of promised fertilizer aid to North in June (May 2007) On 20 May it was reported by Yonhap that South Korea planned to complete shipping 300,000 tons of fertilizer aid promised to North Korea by the end of June. South Korea decided to resume the aid in late March, a few weeks after agreeing with North Korea to resume humanitarian projects in an inter-Korean ministerial meeting. Seoul had suspended food and fertilizer aid beginning in July 2006, when Pyongyang conducted missile tests. Deal Makes Train-run Possible (May 2007) Joongang Ilbo reported that the ROK agreed on 7 May to send raw materials that the DPRK can use in its light industries, but scheduled it to happen June 27 -- after scheduled test-run of an inter-Korean railroad in mid-May. The ROK could therefore halt the shipment if the DPRK cancels the test, as it has done several times in the past. The two Koreas will hold general-level military talks from 10-12 May to guarantee the safety of passengers and trains that will travel across the demilitarized zone. (SITE NOTE: The military talks will most likely again address the Military Demarcation Line (MDL) that the UN arbitrarily set in 1954. It will have to be seen if they allow the train run.) North and South Korea discuss planned railway testing (May 2007) The ROK first wanted a working-level group headed by a colonel to discuss the railway, but the DPRK wanted a "General-level" meeting. This meant that they wanted to discuss the MDL (Maritime Demarcation Line) or NLL (Northern Limit Line). North and South Korean military officials met in North Korea on 8 May to discuss a planned test run of a railway between the two countries on 17 May. As expected, during the first three hours of the three-day summit, North Korean negotiators asked to tweak the boundary between the two countries that extends into waters off the west coast. The North's chief delegate Kim Young-chol said, "I would like to clearly tell you that we never stressed that only the railway issue will be discussed this time. "North Korea demanded that the issue of the Northern Limit Line (NLL), the de facto maritime border that was drawn up after the Korean War, be included on the agenda of the military meeting. North Korea has insisted that the NLL is not the legitimate marine border in the West Sea, and a new border needs to be set. The South maintained that the NLL issue be discussed at higher-level defense ministerial talks. South Korean officials emphasized that they wanted to focus the agenda on the May 17 railway test. (Source: Chosun Ilbo.) On the second day of the meeting, it was announced that the two Koreas agreed on safe passage for trains during cross-border railway tests. "The two sides had no differences in making military security measures needed for the trial operation of trains on May 17," Army Col. Moon Sung-mook, spokesman for the South Korean delegation on 9 May. But the South called for standing measures, not isolated ones, for the future operation of roads and railways crossing the demilitarized zone, he added. Moon said that the two Koreas exchanged their drafts of a joint press release to summarize the results of this week's talks, scheduled to end on 10 May. (Source: Hankyoreh News.) "North Korea maintained it will only give a one-off security guarantee for the planned railway test runs on grounds that part of the Donghae line along the eastern coast remains unconnected," said Army Col. Moon Sung-mook, a spokesman for the South Korean delegation. The military talks are being held at Tongilgak on the northern side of the truce village of Panmunjeom. South Korea wants the security guarantees to be permanent because traffic crossing the Demilitarized Zone is bound to increase sharply. Earlier scheduled test runs were scuppered at the last minute by the North Korean military's refusal to guarantee safe passage. During the test runs on May 17, a train carrying 100 people is scheduled to run from Munsan to Kaesong on a 27.3-kilometer line in the western section, and from Kumgang and Jejin on a 25.5-kilometer line in the eastern section -- all across the border dividing the two sides. The cease-fire line, called the "Military Demarcation Line," will be open that day from 9 a.m. to 5 p.m. (SITE NOTE: It was announced on 12 May that former Unification Minister Chung Dong-young was snubbed by not recieving an invitation to ride. Chung blamed it on his latest tiff with Roh about dissolving the Uri Party, but the administration denied this.) Two five-car trains, each carrying 100 RO Koreans and 50 DPR Koreans, from two sections of the Peninsula are expected to cross the DMZ between 12:10 p.m. and 12:20 p.m. on 17 May. The passenger lists will be exchanged via an inter-Korean economic office in Kaesong on 16 May. With military arrangements now in place, one RO Korean train is scheduled to travel to the North and then return to its point of departure in the west of the peninsula, while the DPR Korean train will travel to the South along the east coast. (SITE NOTE: The lists must be presented to the UNC for approval as the UNC still controls the DMZ.) The two sides agreed during economic talks in Apr to conduct the rail tests on May 17, but that accord lacked consent from the North's military due to the sea border issue. North Korea doesn't recognize the current sea border, drawn by the United Nations at the end of the 1950-53 Korean War, and has long claimed that it should be farther south. The waters around the border are rich fishing grounds and boats from the two Koreas routinely jostle for position during the May-June crab-catching season. In 1999 and 2002, their navies fought deadly skirmishes, killing several sailors and sinking six ships. The train lines were severed with the outbreak of the Korean War. South and North Korea reconnected two tracks, the Gyeongui Line cutting across the western section of the border and the Donghae Line crossing the eastern side, as a result of a 2000 summit meeting. The railways have remained untested, however, due to lack of a military guarantee for their safe operation. The railways could cut transportation costs and delivery times to Europe -- if the Russian portions of the railway are connected. PRC-DPRK Oil Exploration in Bohai Bay (May 2007) Hankyoreh News reported on 9 May that Bohai Bay, bordering on the Chinese coast and extending to the West off the DPRK city of Nampo, has become known as a "golden sea." Recently a billion ton oil field was discovered; enough to power Korea for close to a decade. The DPRK has reportedly discovered an oil field there. However, the West Korea Bay oil field has never really been developed, because American economic sanctions have prevented the oil industry's big players from access. The fact that the PRC and DPRK are as of yet unable to decide where their border is has also been an obstacle. In December 2005 they signed an agreement on joint maritime oil development, marking the start of West Korea Bay floor exploration. U.S. reaffirms N.K. denuclearization must precede Korean peace treaty (May 2007) It was reported on 11 May that the United States was willing to discuss a permanent peace regime on the Korean Peninsula but only when there was progress on North Korea's denuclearization, the U.S. State Department said on 11 May. Washington's envoy to Seoul, Amb. Alexander Vershbow, was quoted as telling South Korean lawmakers that the U.S. is ready to sign a peace treaty with North Korea within this year, on the condition that Pyongyang take steps to dismantle its nuclear weapons program. (SITE NOTE: This is not new and seen as a possible way of extricating the US from the quagmire that is the Korean crisis. However, most pundits agree that the DPRK really does not want a peace treaty, it simply wants bilateral relations with the US. For the past 50 years, the DPRK has built itself around a military-based economy -- culminating in Kim Jong-il's "military first" policy. The suggestion of a peace treaty was first made by President Bush in 2005. The ROK had never signed the armistice -- and though it is engaged in give-aways to the North, it is still technically at war -- and a US-DPRK peace treaty (apart from a UN treaty) would force the ROK into signing a peace treaty of its own with the North.) According to the lawmakers, Vershbow suggested the treaty could be signed ahead of the Asia-Pacific Economic Cooperation (APEC) forum in September 2007. The U.S. Embassy denied the remarks and said the ambassador was misquoted. (SITE NOTE: The ROK media has a tendency to hype news to sell newspapers -- and common-sense would say the statement was ridiculous with a Sep 2007 date. ) One of the U.S. goals is to promote stability in Northeast Asia, one of the world's more volatile regions with China's rise, North Korea's nuclear threat and unresolved history issues dating back to Japan's expansion in the past century. A Korean peace regime would help bring out Pyongyang, one of the most secretive regimes in the world, to the international community and prevent nuclear proliferation. A six-nation agreement signed in September 2005 lays out "basket solutions" to North Korea's nuclear issue, security situation on the Korean Peninsula and the armistice, State Department spokesman Sean McCormack told reporters. But the immediate issue is a denuclearized Korean Peninsula, he said. "That is something that could possibly allow other states to look at these other issues, bring to a resolution longstanding issues like an armistice as well as addressing at some point and fashion North Korea's isolation from the rest of the world," he said. North Korea, as a member of the six-party talks, signed an agreement on Sept. 19, 2005, aimed at removing nuclear weapons and programs from the Korean Peninsula. Pyongyang, in return, would receive political and economic rewards. One of the agreed terms is separate-track negotiations for a peace regime to officially end the Korean War. (Source: Yonhap News.) Iran Calls for Greater Cooperation with North Korea (May 2007) Iranian foreign minister Manouchehr Mottaki stressed the need to boost cooperation with North Korea in talks with its deputy foreign minister Kim Yong Il in Tehran, Iran's official news agency IRNA reported Friday. "The Iranian government is interested in the expansion of ties with North Korea in various political, economic and cultural fields," Mottaki was quoted as saying after the meeting late Thursday. He also said the issue of North Korea's debt to Iran was a key problem but "the two countries can find a formula to remove the obstacle." Kim was quoted by IRNA as calling for Iran's right to access nuclear energy for peaceful purposes. North Korea and the Islamic Republic have been cooperating on the technological development of long and medium-range missile systems and North Korean technicians are suspected of involvement in Iran's nuclear program, which has sparked an international crisis over fears that Tehran is trying to build atomic weapons. (Source: Adnki.com.) S. Korea, U.S. verifying reports on test of new N.K. missile in Iran: source (May 2007) South Korean and U.S. military authorities are trying to verify newly obtained intelligence that North Korea test-launched in Iran a new kind of missile that was only revealed to the public last month, a source here said on 15 May. Speaking on condition of anonymity because of the sensitivity involved, the source said North Korea doesn't appear to have tested the intermediate-range ballistic missile within its territory. "But we did obtain intelligence tips that the missile was test-fired in Iran. I understand that the intelligence communities of relevant countries are tracking down the information," he said. The missile, named "Musudan," is believed to have been developed from the former Soviet Union's SSN-6 model. Its range is estimated at around 4,000 kilometers. The missile was first made public on April 25 at a parade marking the anniversary of the foundation of the North Korean military. North Korea launched seven ballistic missiles on July 4 of last year, including an inter-continental Taepodong-2 that theoretically can strike the U.S. west coast. The Musudan version is estimated to have a range longer than the Taepodong-1 but shorter than the Taepodong-2. (Source: Yonhap News.) Excluding ROK Trade, DPRK Trade Falls for First Time in 4 Years in 2006 (May 2007) Yonhap reported on 14 May that trade between the DPRK and external economies, excluding ROK, fell last year for the first annual decline in four years. In 2006, external trade, excluding with the ROK, came to US$2.99 billion, down 0.2 percent from the previous year. Exports for the same period fell 5.2 percent from a year earlier to $947 million, while imports rose 2.3 percent to $2.04 billion. The ROK's trade agency said on 14 May the decline was mainly due to economic sanctions from Japan and the European Union after the DPRK launched ballistic missiles in July last year and tested a nuclear device three months later. Due to China Protest, North Korea Drug Production Facility PARTLY Closed (May 2007) Daily NK on 21 May reported that several "well-known sources" relayed that the PRC protested strongly to the illicit drug flow from the DPRK and urged that the Heungnam Pharmaceutical Manufacturer in Hamheung be shut down. The DPRK authorities complied, closing the manufacturer responsible for the production of bingdu (known in the West as "ice" or "speed"), a central nervous stimulant. Bingdu was administered to many North Koreans living in Hamheung, to combat the effects of malnutrition and lack of medicines. Predictably, the number of addicted persons has climbed to an alarming rate, especially among the young. (SITE NOTE: Base of speed of speed is ephedrine, widely available from Chinese mao herb (1892) and used in ROK cold medicines -- because of the cheap supply from China. China is a key source of crystal methamphetamine (ice) that is used by many Southeast Asian and Pacific Rim nations. The Chinese Government owns and operates ephedra farms, where ephedra grass (ephedra sinica) is cultivated under strict government control. The active alkaloids, pseudoephedrine and ephedrine, are chemically extracted from the plant material and processed for pharmaceutical purposes. These chemicals are then sold domestically, and for export. China and India are the major producers of these chemicals extracted from the ephedra plant. In addition to government-controlled farms, the ephedra plant grows wild in many parts of the northern areas of China. Manufacture of crystal methamphetamine (ice, shabu, bingdu) is facilitated by the availability of precursor chemicals, such as pseudoephedrine and ephedrine. The unrestricted availability of these chemicals in the country facilitates the production of large quantities of crystal methamphetamine. Seizure information indicates that methamphetamine laboratories are located in provinces along the eastern and southeastern coastal areas. Many of the traffickers for the clandestine crystal methamphetamine laboratories are from organized crime groups based in Hong Kong, Taiwan, and Japan. (Source: FAS.)) North Korean Students in Beijing Called Back Home (May 2007) All North Korean students studying in Beijing have returned to their home country, and some have dropped out of their schools, sources said on Wednesday. According to Peking University, 19 North Korean students from that school left for home before the weeklong May Day holidays starting May 1. None had returned as of 30 May. One North Korean student who was majoring in economics at Peking University's Guanghua School of Management has reportedly quit the school. Many other North Korean students have apparently submitted applications to drop out and have returned to their home country. Currently there are very few North Koreans studying in Beijing. About 200 North Korean studied in the Chinese capital in the 1980s, but now only 50 or 60 are studying there on North Korean and Chinese scholarships. An official with the South Korean Embassy in China said, "The North Korean government has recalled students studying abroad and children of overseas residents, including diplomats, for ideological education every summer vacation. However, it is difficult to understand why the North Korean government has recalled students in foreign countries during the school semester." (Source: Chosun Ilbo.) (SITE NOTE: At the same time, the South Korean media started to hype a possible illness of Kim Jong-il and potential nomination of his successor. Rumors started flying, but nothing was substantiated.) June 2007North Korean defectors tell Japan police they were desperate to escape poverty, oppression Four North Korean defectors told Japanese authorities they were desperate to escape from extreme poverty and oppression in the isolated communist country, police and media reports said on 4 June. Top Japanese officials promised humanitarian considerations but expressed concerns the case could be the beginning of a growing trend. The four — a couple and their two adult sons — arrived at Fukaura port in Aomori prefecture on Saturday, after surviving six days on a desperate voyage across the Sea of Japan.The family told investigators they fled North Korea because "their life was so difficult that they could barely eat bread every other day," prefectural police spokesman Shuetsu Toda said. Each submitted a statement requesting asylum in South Korea, he said. When they arrived, they had only several sets of clothes, chopsticks, leftover sausage and rain gear on the boat, along with their identification cards, a small amount of North Korean money and other small items, Toda said. No weapons were found. The four told police that they fled "to seek freedom," and that there are "no human rights in North Korea," the business newspaper Nikkei reported on 4 June. They originally planned to go directly to South Korea after leaving North Korea's northeastern port of Chongjin on 27 May on a 7.3-meter (24-foot) -long wooden, roofless boat. But they instead headed for the Japanese port city of Niigata to avoid tight security near the border between the two Koreas, Toda said. They ended up at Fukaura in Japan's Aomori prefecture, 800 km to the east, the official added. Prime Minister Shinzo Abe said on 3 June that Japan will protect their human rights and they may be allowed to go to South Korea as they wish. Seoul has indicated willingness to accept them. Foreign Minister Taro Aso said Japan should be prepared for the "possibility of a mass exodus of refugees." "They could be armed, and there is no guarantee asylum seekers to Japan are not spies," Aso said. Officials denied reports that one of the defectors possessed stimulants. North Korea is suspected of illegal narcotics production and trade, along with counterfeiting and money laundering. The family said they had lived on a meager income from octopus fishing and had no acquaintance in Japan, Toda said. They headed for Niigata, linked by a ferry to North Korea until Tokyo imposed sanctions in October to protest the North's atomic test, but ended up in Aomori due to the tide. (Source: International Herald Tribune .) Reuters later reported that the Japanese would probably grant them "temporary" asylum. Japan can grant asylum-seekers a six-month stay permit under its immigration law, and a 2006 "North Korean human rights" law also states the government must take measures to protect and support defectors from North Korea. It is rare for North Koreans to flee to Japan, and it could worsen relations between Tokyo and Pyongyang -- which have no diplomatic ties -- if North Korea demands their return. (Source: Yahoo.com.) DPRK Border Guards Increase Security (Jun 2007) North Korean security guards in border areas are stepping up their preventative measures to stop North Koreans from illegally migrating to other countries, according to a U.S. NGO on 6 Jun, which helps North Korean defectors in Asian countries. ``We obtained evidence that North Korean security guards in border areas carry guns with guard dogs since about four or five months ago,'' Tim Peters, president of Helping Hands Korea, said in an interview with Radio Free Asia. ``The gun is a kind of Russian Dragunov sniper rifle, which can accurately shoot a target from 1,000 meters away.'' Peters said he hadn't personally witnessed any North Korean being shot but had heard shots several times on the border at night. ``CCTVs, high-tech heat detectors and movement detectors are installed not only in North Korea but also in China to stop North Koreans from illegally entering China,'' he said. ``China is also afraid of North Korean defectors as it will host Olympic Games in 2008.'' Russia and DPRK Agree to Open Rajin Port (Jun 2007) On 5 Jun the Donga Ilbo reported that the DPRK agreed with Russia to allow foreign ships enter and leave the port of Rajin. The agreement seems to show the country's willingness to open partially under the mounting burden of economic sanctions. Since 1991, the DPRK had attempted a limited opening of the port as part of the Rason (formerly Rajin-Sonbong) Economic Special Zone Project. However, low participation of foreign investors and the nuclear crisis in 1994 derailed the opening. Unlike the past, however, the PRC and Russia now show keen interest in developing the port of Rajin. Many predict that this time will be different. The port's sea level is deep enough to be advantageous for the development of the port. The PRC and Russia are in competition for such development. (SITE NOTE: Remember that in Feb 2007, the DPRK offered Russia a dollar deal to mine its uranium and access to its port free in exchange for the waiving of its $8 billion debt. This was seen as a lure to attract Russia to support its positions at the upcoming six-party talks. Russia decided to write off more than 90 percent of the US$8 billion it is owed by North Korea. That is more than the 80 percent initially agreed in bilateral negotiations between Moscow and Pyongyang in the Russian capital in Dec 2006. According to sources, Russian chief negotiator to the six-party nuclear talks Alexander Loshukov told his South Korean counterpart Chun Young-woo about the debt write-off plan when Chun was in Moscow on Feb. 1. At the time, the Russian vice foreign minister explained that Russia had reached an agreement with North Korea already and the debt write-off could be used as leverage when the six-party attempts to end North Korea's nuclear program in return for energy aid hit a snag. Some observers speculate that Russia's greater debt write-off is motivated by a desire to reduce its share in paying for the energy aid. (Source: Chosun Ilbo.) DPRK Bought $100 Million Worth of Crude Oil (June 2007) Reuters reported on 7 Jun that the DPRK has bought USD$100 million worth of crude oil from the PRC as it anticipates a delay in energy aid from the stalled nuclear disarmament deal. With oil prices at around USD$70 a barrel, that works out at about 1.4 million barrels of crude. (SITE NOTE: On 23 Apr Kyodo reported that the PRC did not export any oil to the DPRK for the second straight month in March. The zero shipment in March put the total of China's crude oil exports to the country in the first three months of this year at 52,089.93 tons, down 48.4 percent from a year earlier, the General Administration of Customs said. Whether this development was linked in any way to six-party talks was unclear. Another note is that the PRC no longer conducts "barter trade" with North Korea -- and only accepts hard currency for any trade goods including oil. The DPRK has been running an estimated $1.8 billion deficit per year in its international trade accounts that it funds primarily through receipts of foreign assistance and foreign investment as well as through various questionable activities, such as sales of weapons, transporting and producing illegal drugs, and counterfeiting brand name products and currency.) DPRK Workers Asked to Leave Czech Republic by End of Year (Jun 2007) On 9 Jun it was reported by a US broadcaster that about 200 North Korean workers employed by companies in the Czech Republic have been asked to leave the country by the end of this year, as the East European nation refused to extend their work visas. Radio Free Asia (RFA), quoting the Czech News Agency, said the Czech government decided to replace the North Korean manual workers with laborers from Vietnam and Mongolia, following a U.N. resolution against the North over its nuclear weapons program. The Czech Republic's decision also seems to be related to suspicion that wages earned by overseas North Korean workers were exploited by the North Korean leadership in Pyongyang, said the report. Some 200 other North Korean workers were already forced to return home last year for similar reasons, it added. According to the RFA, Czech government officials confirmed that some North Korean workers had asked for their wages to be sent to "one specific account." The U.S. government has frequently called for countries not to hire North Korean workers, arguing their wages are being diverted to the government. "Because the North Korean government takes a major portion of workers' salaries, these arrangements provide material support for a rogue government, its nuclear ambitions, and its human-rights atrocities," Jay Lefkowitz, a U.S. presidential envoy for North Korean Human Rights, said in an opinion piece in the Wall Street Journal earlier this year. (Source: Yonhap News.) U.K. Daily Says Kim Jong-il Very Sick (Jun 2007) North Korea's reclusive leader Kim Jong-il is so sick that he can't walk 30 yards without a rest, according to a report on Sunday by U.K. daily the Telegraph. The report cited Western government sources and was datelined Beijing. "Diplomats in Pyongyang are increasingly convinced that the dictator needs heart surgery to restore his apparently flagging health," the Telegraph said. Kim must be accompanied by an assistant with a chair so that he can sit and catch his breath when he goes out, the paper said. Rumors that Kim's health is seriously deteriorating began to spread when six doctors from the German Heart Institute in Berlin visited Pyongyang for eight days last month. Western diplomats believe the combined medical and surgery team treated the North Korean leader, but a spokesman for the German team denied the speculation. The newspaper wrote that Kim's illness may explain why he has appeared keen to choose his successor. He has apparently put two of sons, Jong Chul, 26, and Jong Woon, 23, through a series of military inspections to ascertain who performed best. (Source: Chosun Ilbo.) (SITE NOTE: Starting in April the European media started promoting the idea that Kim's health was deteriorating and that he was actively seeking a successor. Stories started appearing on his relatives from ambassadors in Europe to stories on his sons potentially in line for succession. There have been stories in the past over Kim's health, but they appeared to have had no substance. This might be the case again.) 'Kim Jong-il had artery surgery in May' (Jun 2007) North Korean leader Kim Jong-il was operated on by a team of German doctors last month to open a blocked artery, a person connected to the Kim regime said. While doctors from German Heart Institute Berlin arrived in Pyongyang prepared to perform major surgery on Kim, they found only one clogged artery, the person said. The 65-year-old Kim, who suffers from diabetes and high blood pressure, recovered well from the surgery, said the person, who asked that his name not be used because North Korea wanted the operation kept secret. The person said while other members of North Korea's elite go abroad for medical treatment, only Kim is important enough to have a team brought into the country. Barbara Nickolaus, a spokeswoman for the institute in Berlin, confirmed that the doctors had been in Pyongyang, and said they were there to treat three workers, a nurse and a scientist. Kim's health has been the subject of repeated recent speculation. Chosun Ilbo, South Korea's biggest daily newspaper, said late last month that South Korean and U.S. intelligence agencies were checking reports Kim was suffering from heart, kidney or liver disease. The Japanese weekly magazine Shukan Gendai said on June 8 a team of six doctors from Berlin was in Pyongyang from May 11 to 19 and conducted heart-bypass surgery on Kim. The North's official Korea Central News Agency said Kim visited factories in North Pyeongan Province near the border with China and spoke with workers on June 7, or less than three weeks after the German doctors left North Korea. NK Daily, a Seoul online news organization staffed by defectors from North Korea, reported on June 11 it had confirmed the report with an "inside source" in North Korea who said the apparently vigorous Kim's June 7 schedule lasted until 1 a.m. Since the 1970s, when he was unofficially designated as successor to his father, Kim Il Sung, Kim Jong-il's health has been the subject of speculation. "Kim does have diabetes and high blood pressure," said C. Kenneth Quinones, a retired U.S. State Department Korea specialist who teaches at Japan's Akita International University. "But there is no firm evidence that either has worsened recently." Kim, who has three sons in their 20s and 30s, hasn't publicly said whether one of them or someone else will be his successor in the world's only communist dynasty. U.S. Concern "The State Department is concerned about his health, at least until he publicly designates an heir," Quinones said. Kim's failure to keep to his usual quota of appearances, such as visits to work units to deliver what the official Korea Central News Agency calls "on-the-spot guidance," often triggers speculation. Given North Korea's nuclear program, all reports about Kim's health have to be taken seriously, said Michael Breen, author of "Kim Jong-il: North Korea's Dear Leader," a biography. "One day the reports will be true," Breen said. "So we can never ignore them." Chosun Ilbo reported in May that Kim had been on official activities 23 times between Jan. 1 and May 27, half the number reported during the same period in 2006. At an April 25 military parade, Kim's eyeglass lenses were different from his usual sunglasses, leading to speculation his diabetes had worsened, making his eyes more sensitive to sunlight, the newspaper said. That was a "false alarm," Quinones said. He said Kim was actually wearing "transition" lenses that turn darker according to the sun's brightness. South Korea's National Intelligence Service concluded Kim's health probably wasn't in serious decline, according to a person who spoke with service agents. At the April parade in Pyongyang, South Korean agents watched Kim review troops for two hours with no signs of fatigue, a sign his health isn't fragile, said the person, who asked not to be named because of the sensitivity of the information. Chain-Smoker Kim is a former chain-smoker whose lifestyle -- including a reported fondness for cognac and delicacies -- may contribute to his diabetes and high blood pressure. His father died, reportedly of cardiovascular disease, at 82 in 1994. Questions about the younger Kim's health were heightened during a long disappearance in the late 1970s, prompting speculation he was dead or seriously incapacitated from injuries in a car accident caused by people opposed to a hereditary succession. After his formal elevation to succeed his father in 1980, the official media portrayed him as a tireless worker for the people's welfare even at the risk of his own health. Kim looked pale and thin at the ceremony designating him as successor, causing North Koreans to write critical letters to officials for failing to take care of his health, official media reported at the time. Kenji Fujimoto, a Japanese chef who served Kim at his Pyongyang palace, said in a pseudonymous book he wrote about the experience that the North Korean leader would complain about the medicine he had to take. In the book, "The Private Life of Kim Jong-il," Fujimoto quoted Kim as saying, "Do I have to keep taking these pills every day until I die?" (Source: Korea Herald: Bloomberg Chill in North-South Relations? (Jun 2007) North Korea on 12 Jun accused South Korea of violating the western sea border, and said it would sternly deal with what it calls a military provocation. "The South's war-mongers are continuing a vicious military provocation by sending its warships deep into our territorial waters," the North's People's Army Navy Command said in a statement carried by the country's Korean Central News Agency. The ROK government was also snubbed for invitations to the anniversary of the Inter-Korean summit in North Korea. Though civilians were invited, a list of officials from the government had not been accepted as of 12 Jun. South Korea finalized a list of delegates to planned joint civic events in Pyongyang to mark the seventh anniversary of the historic inter-Korean summit held in 2000, organizers said. "We gave a quota to groups, regions and sectors participating in the South Korean organizing committee for the event, and let them choose participants," a committee organizer said on condition of anonymity. It was assumed that the ROK refusal to send rice aid to the North pending denuclearization steps caused the slight. Likewise inter-ministerial meetings and military heads meetings in May and June 2007 have resulted in lack of agreements on issues. Skepticism is growing over South Korea's planned first shipment of light industry raw materials to North Korea, as the two sides have yet to settle remaining differences on the list and price of items, a senior Unification Ministry official said on 12 Jun. "It is a moot question whether we will be able to make the first shipment on June 27 because of the dispute over items, price and numbers," Kim Joong-tae, chief of the South-North Korea economic cooperation bureau, said in a seminar. South and North Korea held talks on 12 Jun to discuss ways of facilitating and expanding the operation of their joint industrial complex, officials here said. The two Koreas are currently runninng the complex in the western North Korean border city of Kaesong, where South Korean businesses use cheap North Korean labor to produce goods. However, there appears to be problems in the offing with the US-ROK FTA attempts to skirt the issue of Kaesong by setting up a committee to review an OPZ "at a future date." There is Congressional dissent from some US senators dealing with labor issues and human rights. DPRK Slams UN over Human Rights (Jun 2007) Asia Pulse reported on 21 Jun that the DPRK on June 17 criticized a UN plan to maintain monitoring of its human rights conditions and vowed that it will not allow any foreign observers into the country. As the UN Human Rights Council is likely to decide on the future of its special rapporteur system for the DPRK, Myanmar, Cuba and Belarus on June 18, the body's president, Luis Alfonso de Alba, suggested in the latest report that a close watch should be maintained only on DPRK and Myanmar. Choe Myong-nam, a councilor at the DPRK's diplomatic mission to Geneva, denounced De Alba's proposal and vowed to maintain the DPRK's boycott on the council's operations on his country. "As it is unfair to extend the special rapporteur system on our country, we firmly denounce it," the envoy said. "We won't accept in any case any special rapporteur in relation to (North Korea's) human rights, and our position remains unchanged that we will keep rejecting a special rapporteur in the future," he said. (SITE NOTE: The bottomline is the DPRK is still condemned for its human rights abuses and the UN is completely ineffective in resolving the problem with its administrative "monitoring.") July 2007Some North Koreans Test Regime's Iron Grip (Jul 2007) On 7 Jul the Economist reported that foreigners living in Pyongyang say that people break petty laws, daring to smoke beneath no-smoking signs and sitting on the moving rail of escalators. People have blocked traffic by selling furniture in streets famous for regimented traffic flow, and some have dared break the seal on their radios that block the reception of nonstate-provided broadcasts. At the same time, there are indications that the leadership is beset by infighting. For a brief time following the February six-nation agreement, fewer military officials were sighted in public with leader Kim Jong Il. Lately, the uniforms have returned.North Cracks Down on "Korean Wave" of Illicit TVRadio Free Asia reported on 17 Jul that authorities in the DPRK are intensifying a crackdown on imports of ROK popular culture, especially television dramas, but the "Korean Wave" may already have taken a strong hold. One of the smash-hit TV dramas to emerge from South Korea in recent years has been "Winter Sonata," a delicate and emotional love story that has spawned its own fashions as people seek to imitate details from the story. There have been two or three reports of public executions of young people in major cities including Chungjin, as punishment for having illegally copied and distributed ROK visual material. TIME: DPRK Acts Like Organized Crime (Jul 2007) According to a Time Magazine article "North Korea: Sopranos State," through a state-owned conglomerate called Daesong, Bureau 39 oversees export businesses owned and run by the North Korean government--mainly textile and other light-manufacturing factories and some mines. But Bureau 39 also houses another, shadowy directorate that oversees illicit enterprises ranging from drug trafficking to money laundering. According to TIME interviews, those illegal activities earn, by some estimates of about $1 billion a year for the senior Pyongyang leadership. Considering that in 2005, all of North Korea's legitimate exports totaled $1.7 billion, one can see how important this lucrative trade is. Kim's criminal businesses not only stretch across Asia but also have managed to gain footholds in Russia, Europe and the U.S. Among the regime's illicit activities are the production and trafficking of opium and heroin to dealers around the world, the manufacture and sale of billions of counterfeit cigarettes and the production of tens of millions of dollars in forged U.S. currency sophisticated enough to evade detection by U.S. banks. In many cases, the transactions are conducted not by rogue gangsters but by North Korean government officials, including members of the country's diplomatic corps stationed overseas. GROWING TIES TO ORGANIZED CRIME The big worry among U.S. and Asian intelligence officials is that "the [North]'s growing ties to organized-crime groups and illicit shipping networks could be used to facilitate weapons-of-mass-destruction shipments." Later this year, the U.S. is expected to go to trial in New Jersey on a case targeting alleged members of a Chinese organized-crime gang accused of moving counterfeit currency, illegal narcotics and contraband cigarettes from North Korea into the U.S.--in addition to at least $1 million in illegal weapons such as pistols, machine guns and rocket launchers. ILLICIT DRUGS: In most countries, the narcotics business is conducted by private organizations in the shadows as corrupt officials look the other way in return for payments. According to several defectors who say they were involved in the narcotics trade, government trucks transport the opium harvested in North Hamgyong province to a factory outside Pyongyang run by Raemong Pharmaceuticals, a government-owned firm. A North Korean defector who claims he was a key middleman in the narcotics business alleges that Raemong is mainly a normal drug company. But, he says, it also converts opium into heroin headed abroad. North Korea has used several methods to get its drugs to market. Those methods include having its diplomats carry drugs like crystal meth in their luggage as they head for overseas posts. In the case of heroin, say sources in law enforcement and intelligence, more traditional methods are typically used. Ships flying international flags head for nearby ports--in particular, Vladivostok in Russia's far east and Hong Kong--where organized-crime groups take over. The North's neighbors are taking steps to root out the menace of North Korean drugs. In 2006 the Vice Minister for China's Public Security Bureau, Meng Hongwei, held a rare press conference to announce his "fierce determination" to combat North Korean drug rings operating in Jilin province in northeastern China. The North's drug dealings also extend to Japan, where in a four-year span, Japanese authorities seized 3,300 lbs. (1,500 kg) of crystal meth trafficked by North Korean gangs. And the Australian navy in 2003 boarded a North Korean vessel headed for the South Pacific and discovered it was packed with more than $45 million worth of high-grade heroin. (SITE NOTE: In 2007, China asked the North to stop producing "ice" (Meth) from one of its drug factories because of the growing cross-border trade. The meth is used to combat malnutrition and the effects of starvation -- an indictment on the North's policies in itself. In the Australian case, in 2006 the ships captain and crew were found "not guilty" but the Australian government sank the ship used for the shipment immediately after the trial. In Japan, the crackdown on all North Korean shipments resulted in the seizure of one boat used for illicit drugs. Surprisingly some of these boats have links to South Korea.) Despite such measures, there is little evidence that North Korea has been deterred from the drug business, particularly as demand rises in Russia and China. An East Asian intelligence source estimates that the trade is still worth "several hundred million dollars a year to the regime." . CONTRABAND CIGARETTES: North Korea is not the only player in the game of contraband cigarettes. The private investigator's report for the cigarette industry found that 10 to 12 factories in North Korea produce a total of 41 billion contraband cigarettes a year, shipped out of the North on "deep-sea smuggling vessels." They are then off-loaded at sea to smaller, high-speed vessels that deliver the cigarettes to traffickers in East Asia. That allows the deep-sea smuggling ships to remain in international waters, beyond the reach of any country's law-enforcement authorities. In late 2004, private investigators witnessed 6,000 master cases of cigarettes--each containing 10,000 smokes--being unloaded at Subic from a fishing vessel that routinely runs between Taiwan and North Korea. Since then, according to a North Korean defector intimately involved in the smuggling of phony cigarettes, "the business has only gotten bigger." This source, who did not want his name used for fear of reprisal in North Korea, where his immediate family lives, says export routes for contraband cigarettes--carrying popular name brands such as Marlboro, Benson & Hedges and Mild Seven, among others--are now multiple and varied. North Korea's military- and internal-security services are "significant players" in the cigarette business, according to the source who used to be in the game. The North uses both homegrown and imported tobacco in these contraband businesses. A large source of phony cigarettes is the Dongyang Cigarette factory in Pyongyang, owned by a company called Kosanbong, which is controlled by North Korea's internal-security bureau, according to the 2005 private report and a defector interviewed by TIME. The North Koreans have been able to import equipment from Taiwan and mainland China to produce the cigarettes. Overall, the trade generates $80 million to $160 million in profit for the regime every year, the study claims. That cash is then spread among Pyongyang's élite to ensure loyalty to Kim, say multiple sources. The illicit-cigarette business is a window into how North Korea arranges and moves its whole range of illegal products. The regime uses shipments of contraband cigarettes to export other goods, including narcotics and weapons. North Korea has successfully exported contraband cigarettes from its two major container ports using ships registered in other countries. Some of that material may have found its way to the U.S. -- an indication of how easily weapons of mass destruction (WMD) from the North's arsenal could be smuggled to other countries if Kim were tempted to put them up for sale. SUPERNOTES: The case of supernote continues. In late 2005, federal agents were involved in two elaborate undercover operations in California and New Jersey--code-named Royal Charm and Smoking Dragon--arrested several alleged members of Chinese organized-crime gangs known as triads. In addition to narcotics, phony brand-name cigarettes and bogus pharmaceuticals, the investigators found $4 million worth of unusually well-produced counterfeit $100 bills. "There's no way an ordinary bank teller in the United States, let alone overseas, is able to identify these notes [as forgeries]," says an American law-enforcement official. In the indictments that followed--the first trial is expected to start this summer--one of the people charged, Chao Tung Wu, a citizen of Taiwan, says the supernotes were produced by the "government of a country" identified in the indictment as "Country Two." That, sources in the U.S. and East Asia say, is North Korea. According to U.S. and South Korean intelligence reports, the North has been producing the counterfeit bills at least since 1994. The South Korean intelligence service two years ago said it could confirm production only until 1998, but at least twice in recent years, claim U.S. and South Korean sources, the U.S. has presented the South Korean government with supernotes said to have been produced in 2001 and 2003. A 2006 State Department estimate puts the amount of counterfeit currency in circulation at $45 million to $48 million. Estimate is the key word. Of all the illicit businesses from which North Korea profits, counterfeiting is the one about which outsiders know the least. U.S. officials say they don't believe the North Koreans produced the equipment to print such high-quality counterfeit bills. If that's the case, where did they get it from? No U.S. agency interviewed for this story, including Treasury, State and the Secret Service, could say. U.S. sources also say they do not know where in North Korea the notes are produced. It does seem likely, however, that Kim's government is running the scam. Harvard researcher Chestnut says that since 1994, there have been at least 13 incidents in which North Korean officials, diplomats or employees of government-owned companies have been implicated in carrying counterfeit currency abroad, mostly to embassies in Europe and elsewhere in Asia, from which the bills are sold and slipped into local circulation. Pyongyang last year denied it had ever forged U.S. currency but said it would, in concert with other nations, continue its fight "against all sorts of illegal acts in the financial field." (Source: Time Magazine, "North Korea: The Sopranos State," 12 Jul 2007.) Red Herring: DPRK Proposes Setting Joint Fishing Zone North of NLL (Jul 2007) Yonhap news reported on 16 Jul that the DPRK had proposed that the two Koreas establish a joint fishing zone in waters near the disputed maritime border in the West Sea, a military source here said 15 Jul. The ROK, however, is not in a position to accept the proposal, since the de facto sea border between the two Koreas was set unilaterally by the United Nations Command at the end of the three-year Korean War in 1953. (SITE NOTE: This was part of the military meetings between the two nations. The DPRK knows full well that the ROK cannot move the NLL without abrogating any agreements with the UNC. Thus the empty gesture allows the DPRK to look generous without having to give up anything. At the same time, the ROK will be seen as the party unwilling to resolve the problem. Of course, if the ROK made the same offer, it would also abrogate the NLL agreement.) Drug Addiction in the DPRK Amongst Tradesmen (Jul 2007) The Daily NK reported on 16 Jul that the use of drugs among DPRKoreans is on the rise. Surprisingly, consumers are among the growing class of "nouveaux riches". Considering the DPRK's cost of living, people who are falling into the trap of drugs are among those who earn more than 100,000won per month. (SITE NOTE: Earlier it had been reported that there was growing addiction amongst the poor as the government used "ice" (meth) a metamphetamine to treat malnutrition. The drug was produced by government factories on the Chinese border and the Chinese protested the increasing distribution in China.) N.K. demands pay raise for workers in inter-Korean industrial complex (Jul 2007) North Korea has demanded a 15 percent pay raise for its workers from South Korean companies at an inter-Korean industrial complex just north of the border, sources said on 27 Jul. In a bid to press for their demand, the North notified South Korea that North Korean workers will refuse to work extra hours or on weekends and holidays starting from August. (Source: Yonhap News.) (SITE NOTE: The serpent has entered paradise. The only value of Kaesong was the cheap labor, but now the increase in wages threatens the selling point of Kaesong -- a docile and cheap labor force. What the ROK forgot to take into account is that the North will squeeze a cash cow of all its worth when it has the advantage. With all the ROK past investment, the North has the advantage.) North settles for 5 percent raise (Aug 2007) On 3 Aug, South and North Korea agreed on a 5 percent pay raise for North Korean workers employed by South Korean companies in an industrial complex just north of the border. In a new deal, North Korean workers working in the Kaesong industrial complex are to earn about $60.37 in basic pay, including insurance, which accounts for 5 percent of the total. This is the first time that North Korean workers have received a pay raise since the complex began operations in late 2004, in spite of such demands being made several times. Currently, 26 South Korean companies employ about 15,000 North Korean workers in Kaesong, including construction and office workers, at the site developed on a trial basis. The number of North Korean workers is expected to increase to more than 350,000 when the complex becomes fully operational by 2012. (Source: Joongang Ilbo.) August 2007North Hit by Flooding (Aug 2007) The United Nations Food and Agriculture Organization estimates that damaged crops due to the heavy flooding in North Korea could reach as much as 300 thousand tons. The Voice of America radio said it was likely to face a shortfall of more than 400,000 metric tons of food this year -- even if it receives aid from South Korea and the international community. Devastating floods are believed to have destroyed up to 14 percent of the North's farmland. The number of dead and missing is estimated at more than 300, with the homeless numbering about 300,000. An estimated 46,580 homes of 88,400 families were destroyed or damaged, according to the North's media.. The UNFAO agency said the flood came in a critical time in the growth of rice and corn and that it hit particularly hard the provinces of South Pyeongan and Hwanghae, the country's major cereal-producing regions. The FAO predicted that more than eleven percent of all rice and corn fields are flooded. The damage total 26 thousand hectares of farmland in South Pyeongan, 20 thousand in South Hwanghae and 37 thousand in North Hwanghae province. The UN agency also cited difficulty in making accurate assessments as the rain continues and farmlands are still under water. It says that the country's harvest this year will depend on the weather of the upcoming months. The South has promised $3 million worth of aid through NGO groups, while the US embassy donated $100,000 in aid to the North through NGO groups. The World Food Program was stated it would send aid, but was attempting to ascertain the extent. The media published photos of Pyeongyang under water. Agence France-Presse on 20 Aug reported that ROK officials said they had in the past week recovered at least 10 bodies, believed to be victims of devastating floods in DPRK, from a river that crosses the border. The bodies -- one on Monday, five on Wednesday, three on Friday, one on Saturday -- were recovered from Imjin River which runs across the border, the South's Dongducheon fire station rescue team said. UN agencies said on Friday that half of the country's main health centers have been submerged by floods and warned that the situation could deteriorate unless aid arrives rapidly. Yonhap on 18 Aug reported that at least 12 nations have offered or begun to provide relief aid for the DPRK hit with severe flooding. Margarita Walstrom, a U.N. special envoy for relief aid, said U.N. members, including ROK, Japan, the United States, Russia, Italy and Finland, have pledged financial aid. The U.S. government is giving US$100,000 humanitarian relief through non-governmental organizations. Meanwhile, Australia said it will provide $1.6 million worth of food aid to North Korea as part of emergency relief efforts through the World Food Program. The planned summit between President Roh Moo-hyun and Kim Jong-il on 28-30 Aug was postponed at the request of the North due to the flooding. The summit was rescheduled for 2-4 Oct. Aid to Go Overland (Aug 2007) The South Korean government's emergency relief aid to North Korea will be delivered over land starting 23 Aug. Unification Minister Lee Jae-joung announced Sunday that Pyongyang following Seoul's aid proposal on 17 Aug has agreed to accept the aid package via land routes, deemed the fastest delivery method. Two hundred trucks will deliver medicine, daily necessities and food worth W7.1 billion (US$1=W950) to the North's border city of Kaeseong after the South Korean National Assembly approves the plan. Minister Lee said the government is also reviewing ways to provide about US$3.2 million to a civilian aid group that plans to give $16 million worth of assistance to help the neighboring country recover from severe floods. The Choson Sinbo, a pro-Pyongyang newspaper for ethnic Koreans in Japan, said that North Korean authorities believe that their country's recent flood damage may be ten times worse than last year, and are concerned that food shortages might get worse. The Choson Sinbo quoted North Korean official Jo Yong-nam, who serves as chief of his government's flood damage task force, as making the estimate. The paper had reported that during the flooding in mid-July last year, 844 died or were injured, 28-thousand lost their homes and nearly 230 square kilometers of farmland were damaged. The official said that efforts are under way to wrap up the first-phase recovery work by next month and that railways between Pyongyang and Chongjin have been restored although sections remain severed in mountainous regions. (Source: KBS News.) Torrential Rains leave 600 dead (Aug 2007) North Korea said on 25 Aug that the torrential rains that swept through the country this month left at least 600 people dead or missing, twice the number previously reported by both Pyongyang and international aid groups, according to Yonhap News Agency. The closed communist state reported earlier that about 300 people were dead or missing after the downpours. The downpours "left at least 600 people dead or missing and thousands of people wounded," reported the Korean Central News Agency (KCNA), North Korea's official news outlet monitored in Seoul, citing information from the Central Statistics Bureau. In an unusual in-depth report on flood damage, the KCNA said 500-800 mm of rain has fallen since Aug. 7, leaving at least 100,000 people homeless and some 900,000 people affected in the country of about 23 million. In addition, the drinking water supply was cut off in many regions as pumping stations for water were submerged, 800 electric poles collapsed and many hydraulic power stations and coal mines were destroyed, it said. (Source: Korea Herald.) N. Korea may face famine acute as mid-1990s next year, S. Korean researcher warns (Oct 2007) North Korea is expected to suffer from an acute food shortage next year and could face widespread famine as severe as that it suffered in the mid-1990s in the wake of devastating floods this year, a South Korean state-run research institute warned on 18 Oct. The floods are likely to cut North Korea's autumn agricultural output by as much as 500,000 tons, nearly a tenth of the country's "minimum demand" for grains, said Kwon Tae-jin, a senior researcher at the Korea Rural Economic Institute. Overall food shortages in North Korea, which is still recovering from the famine in the mid-1990s, are believed to reach about 1.4 million tons, compared with the country's grain consumption of 5.2 million tons, the researcher said. "If no special measures are taken, North Korea's food shortage will likely be at a similar level to that of the mid-1990s," Kwon said in a report published by Hyundai Economic Research Institute, a private economic think-tank. Various estimates have shown that nearly two million people died from food shortages and related illness since 1994 in North Korea, which has suffered from a series of natural disasters along with economic mismanagement. Last year, North Korea asked international aid groups to end food aid it received since the mid-1990s. However, this year's floods prompted North Korea to seek international food aid again, underscoring the seriousness of the flood-related damages. In mid-July, the foods left at least 549 people dead and 295 missing, North Korea's state media reported. This year's floods are likely to cost North Korea a total of US$275 million in lost agricultural production and repair spending, Kwon said. Since the floods, the South Korean government and the World Food Program have supplied some 350,000 tons of food to North Korea, the researcher said. South Korean officials said the United States and Japan were also considering offering food aid to North Korea, in a sign of easing tension as Pyongyang is taking steps to dismantle its nuclear weapons program. (Source: Hankyoreh News.) October 2007Kaesong Production Surpasses $200 Million (Oct 2007) IFES NK Brief on 16 Oct reported that the Kaesong Industrial District Management Committee reported on October 10 that after two years and nine months of operation, the total value of goods manufactured in the Kaesong Industrial Complex (KIC) surpassed 200,000,000 USD. In 2005, production by companies in the KIC totaled 15,000,000 USD; in 2006, 74,000,000 USD; and in the first 9 months of 2007, 124,000,000 USD, for a total since 2005 until last September of 213,000,000 USD. There are currently a total of 45 companies operating in the complex, employing 19,433 DPRK workers and 800 workers from the ROK, for a total of over twenty thousand employees.Chosun Ilbo reported on 16 Oct that a ceremony will take place in the DPRK to mark the end of phase one construction at the Kaeseong industrial park. Some 340 ROK delegates will attend the milestone event. Heading them up will be Seoul's Unification Minister Lee Jae-joung joined by the heads of the Korea Land Corporation and Hyundai Asan, operator of tours to the North's Mount Geumgang region. Phase two, to cover an even bigger footprint of over 8 million sq.m, will break ground next year with the land corporation taking the helm. NK grounded AN2 planes due to lack of oil for training flight: source (Oct 2007) On 28 Oct, Yonhap News reported that soaring oil prices have almost grounded hundreds of AN2 special warfare planes in North Korea capable of infiltrating deep into South Korea in case of war. North Korea, suffering from a shortage of hard currency due to years of economic stagnation, imports most of its oil from China, some in cash, some on grants, and some from a few Middle Eastern countries. North Korea has gradually reduced the number of training sorties of about 300 AN2 planes in recent months due to oil shortage before almost grounding them recently, the sources said. An AN2 is said to be able to fly at a low altitude at a speed of 250 kilometers per hour to avoid any radar system while carrying 1.5 tons of freight and up to 13 special warfare troops. "We understand North Korea has stopped flying AN2s for a considerable time to funnel the oil for AN2s to other planes," one source said. (Source: Yonhap News.) November 2007Budget Defections increase (Nov 2007) Brokers here are busily selling what they call "planned escapes" from North Korea. Given enough money, the brokers say, they can now get just about anyone out of the dictatorial Stalinist state that human rights activists call the world's largest prison. A low-budget escape through China via Thailand to Seoul, which requires treacherous river crossings, arduous travel on foot and several miserable weeks in a Thai immigration jail, can cost less than $2,000, according to four brokers here.A first-class defection, complete with a forged Chinese passport and an airplane ticket from Beijing to Seoul, goes for more than $10,000.From start to finish, it can take as little as three weeks. North Korea's underground railroad to the South is busier than ever because the number of border guards and low-level security officials in the North who are eager to take bribes has increased exponentially. With the disintegration of North Korea's communist economy and the near-collapse of its state-run food distribution system, the country's non-elite population is in dire need of cash for food and other essentials, experts agree. "More than ever, money talks," said Chun Ki-won, a Christian pastor and aid worker in Seoul who says that in the past eight years he has helped 650 people elude Chinese authorities and settle in Seoul. Religious groups once dominated the defection trade in North Korea, but in recent years defectors themselves, many of them former military and security officers, have begun to take over, several brokers and religious leaders said. This new breed of broker, based in Seoul, uses personal and institutional contacts to hire North Korean guides and to bribe officials. The guides make clandestine contact with defectors, then escort them to the Chinese border, which in most places is a river that they swim in summer and walk across in winter after it freezes. On the other side, Chinese-speaking guides take over. "I didn't know it could happen so fast," said a 37-year-old North Korean defector who paid $12,000 to a broker in Seoul in 2002 to get her 11-year-old son out. The woman did not want her name published because this month she and her siblings are paying another broker to smuggle out their mother. "It only took five days for my son to be plucked out and taken across the river into China," she said, adding that two weeks later he was in South Korea. "I was dumbfounded when I got a call from officials at Seoul airport and my son was here." For years, North-to-South defections amounted to just a trickle. Most of those coming out were men in their 30s and 40s who held positions that made fleeing relatively easy, such as diplomatic work abroad or border duty with the military. Generally, they escaped without help. Just 41 defectors sought asylum in South Korea in 1995, but nearly every year since then the number has risen, the flow enhanced by the networks of brokers and agents that sprang up. More than 2,000 North Koreans settled here last year, according to the government in Seoul. As the number has increased, the typical sex and age of defectors have also changed. There are more women and more families, according to Chun Sung-ho, an official at South Korea's Ministry of Unification. Those figures do not include the many more North Koreans who are hiding in China without connections to brokers who can bring them on to South Korea. The New York-based human rights group Amnesty International estimates their number at about 100,000, a substantial proportion of whom are women who have been sold into prostitution. For all the functionaries who are newly willing to take money to look the other way, for all the recent diplomatic optimism that North Korea may be opening up, working on the underground railroad remains extremely risky. "It is possible to get people out, but you cannot say it is easy," said Lee Jeong-yeon, a former North Korean military officer who defected in 1999. A lot of guides and brokers get caught, he said, adding: "The policy is for 100 percent execution of those caught helping people to defect. I personally saw several such executions." Lee, whose identity was confirmed by the South Korean government, said he worked for three years along the Chinese-North Korean border, where he supervised agents who pretended to be brokers and guides in order to infiltrate and disrupt the smuggling trade. "The successful brokers are experienced people who have good contacts in the military, and they bribe the guards," said Lee, who said he has used his contacts to smuggle 34 North Koreans across China and into Southeast Asia. "Guards are rotated often, and new people have to be bribed." (Source: MNBC: Washington Post.) Secret journalists report on North (Nov 2007) On 21 Nov, the Joongang Ilbo reported on supposedly a network of "secret journalists." The grainy video featured old women in clothes that hung from their thin frames scrounging for bottles in a market in Pyongyang that they planned to sell to recyclers. Images like these have been seen before but this footage shown at a press conference in Seoul on 20 Nov is different, according to a Tokyo-based journalist, because it was shot by the first independent reporters to ever work inside North Korea. Ishimaru Jiru, of the Japan-based Asia Press International, said his group is also launching the first-ever magazine to print independent journalism by North Koreans and about North Koreans. Called Limjingang, the bi-monthly magazine will be launched this month and distributed in both North and South Korea. It will also be translated into English and Japanese, Jiru said. “Despite all of the limitations, we will go around every area of North Korea, and we strongly believe in reporting the truth,” he said. Jiru, who speaks Korean, said he has visited the North Korea-China border more than 50 times and interviewed about 600 defectors. He said the project started out of frustration that he could not report what was happening inside North Korea. “We wanted to find out what North Koreans thought, what they were doing inside North Korea and what their lives were like,” he said yesterday through an interpreter at the Foreign Correspondents Club. “I came to think we needed someone inside.” Jiru put the word out and found a North Korean defector in China willing to risk his life to surreptiously shoot video and interview people inside his home country. “Because of the risks, I waited for someone to volunteer,” Jiru said. In 2002, he met a man who calls himself Lee Jun. Jiru explained his idea and Lee returned home to think about it.“The main goal for this reporter was to institute journalism in North Korea,” Jiru said. Jiru taught his recruit about ethics, and the importance of accuracy. He told him not to accept bribes and he trained Lee on the equipment. “In 2004, though he wasn’t completely ready, he filmed a marketplace [inside North Korea],” Jiru said. “At first, things weren't perfect. The reports were vague. But as time went by, he became a very good reporter.” Lee has recruited five other clandestine reporters, Jiru said, and they get help from 10 more inside North Korea. Jiru has given them 30 cameras to use. Since these reporters could face imprisonment or worse if they are captured, they sometimes conduct interviews without telling the interviewees what they are doing, Jiru said. He said he meets with the reporters when they cross back into China. Jiru said his group is very careful about what information is released, although they have gathered “a very large amount” in the past three years. He said the North Koreans wanted to start the magazine to bring news to their own people. “It’s also important to let the North Koreans know what is going on in the outside world,” he said. The magazine will include stories ranging from the general views of North Koreans to their thoughts about Kim Il Sung to crises such as the extensive flooding last August. “Since the North Korean media is controlled by the government, there isn’t a way for the North Korean people to express themselves,” said Choi Jin I, a North Korean who defected to the South in 1999 and is working with the magazine. “I believe this will be the seed.” Choi said the magazine will be written in Korean, but it might not be recognizable to Southerners. “We will use the exact grammar that North Korean people use,” she said. The version that gets distributed in North Korea will also be edited a second time for security reasons. (SITE NOTE: There has to be more here than meets the eye. To a reasonable person, this seems more of a cover for a spy network -- with a magazine to be distributed in NORTH KOREA that will aim to subvert the DPRK in the name of "truth." This is highly suspect, BUT this is also an encouraging sign that the borders are now so porous that such activities could be possible.) (Source: Joongang Ilbo.) US Stations Permanent Diplomat in Pyongyang's Koryo Hotel (Nov 2007) A U.S. diplomat has been stationed permanently at the Koryo Hotel in Pyongyang since mid-November, a source said on 25 Nov. The development comes as U.S.-North Korea relations are improving as Pyongyang implements its promise to disable its nuclear facilities at Yongbyon by the end of the year. A source in Washington said that the U.S. plans to dispatch another permanent diplomat to Pyongyang soon, with the Koryo Hotel likely to serve as a de facto U.S. liaison office in North Korea. This is the first time the U.S. has ever stationed a permanent diplomat in Pyongyang, and it suggests the possible normalization of relations between the two sides. The Washington source said, "A foreign service officer in charge of administrative affairs from the U.S. State Department has been staying at the Koryo Hotel in Pyongyang, using his room as both an office and living quarters. He is mainly carrying out administrative liaison efforts between the U.S. and North Korea." The diplomat is apparently serving as a liaison officer for U.S. delegations to Pyongyang and figuring out their staying expenses there. The temporary U.S. office at the Koryo Hotel is said to be fitted out with exclusive telephone and fax lines and a computer with an Internet connection. The U.S. is expected to dispatch a senior diplomat to Pyongyang who will handle political affairs when North Korea completes the disablement of its nuclear facilities. This senior diplomat will also participate in talks with Pyongyang and visit the nuclear sites at Yongbyon on a non-regular basis to inspect the progress of the disablement and dismantlement of the facilities. Washington and Pyongyang agreed on this through meetings between chief U.S. negotiator to the six-party talks Christopher Hill and his North Korean counterpart Kim Kye-gwan and through "a channel in New York," the source said. The U.S. is expected to operate its temporary office in Pyongyang with a staff of two diplomats for the time being, with a view to upgrading the office to a regular liaison office or a permanent mission if North Korea clearly shows its intention to fully dismantle its nuclear programs. The agreement to operate a de facto U.S. liaison office in Pyongyang suggests that the two sides strongly intend to improve their relations. Washington and Pyongyang agreed at the 1994 Geneva Accords to open a liaison office in Pyongyang upon concluding talks on the first North Korean nuclear crisis, but that agreement was never realized. (Source: Chosun Ilbo.) Successor to Kim Jong-il maybe Second Song??? (Nov 2007) Donga Ilbo on 26 Nov reported that Kim Jong-chul (27), the second son of Kim Jong-Il, was appointed assistant vice chief of the Organization and Guidance Department of the Workers' Party of Korea, reported Mainichi Newspapers of Japan on November 24, quoting a PRC source. Kim Jong-chul works at the main complex of Central Committee of the Workers' Party where the office of Kim Jong-il is also located, and frequently receives orders from his father. As no other sons have been appointed to major posts yet, Mainichi analyzed that Kim Jong-chul is the most likely successor to Kim Jong-il. Military Talks Between DPRK and ROK Ends With Mixed Results (Dec 2007) Korea Herald on 13 Dec reported that the ROK and DPRK militaries agreed on ensuring cross-border security that will serve to boost business in the Gaeseong Industrial Complex and tourism to Mount Geumgang, Seoul's Defense Ministry said yesterday. General-level officers from the two sides signed an agreement late Wednesday night to provide safety assurances for people and equipment which pass through the heavily-fortified inter-Korean border, the ministry said. They also adopted a set of new rules for cross-border travel, communications, and customs inspections, which are relaxed in comparison to the past, it said. (NOTE: This comes on the heels of the opening of the railroad carrying cargo to Kaesong on a regular basis.) Associated Press on 14 Dec reported that the two Koreas ended three days of talks Friday without an agreement on creating a shared fishing zone. "We couldn't agree with the North's opinion so we couldn't reach a settlement today," said Col. Moon Sung-mook, spokesman for the ROK delegation. The South wanted the fishing area on both sides of the demarcation line, while the DPRK wanted the fishing zone completely in the south. The DPRK agreed to allow ROK citizens to use the Internet and cell phones while inside the DPRK for two joint industrial and tourism ventures. (SITE NOTE: ROK Tourism companies in Dec sued the ROK government for giving a monopoly to the Hyundai Ansan group for handling the tourism to Kaesong and the Mount Geumgang resort.) UNDP FIASCOUNDP to Stop Paying Cash for Operations in N.Korea (Jan 2007) The U.N. Development Program (UNDP) says that it will stop paying cash for its operations in North Korea. It also says that it will start an independent audit as suspicions are arising that its past work resulted in the funneling of a large sum of money into a regime bent on developing nuclear weapons.The announcement came after U.N. Secretary-General Ban Ki-moon said he will ask for an urgent investigation into all global activities by U.N. agencies. The Wall Street Journal reported on 18 Jan that Washington believes the UNDP's program in Pyongyang operated in blatant violation of U.N. rules and ended up giving the North a large, steady source of hard currency. The US daily said that a Jan. 16 letter to the UNDP by U.S. Ambassador Mark Wallace claimed that the cash and resources were given without an assurance that they would go toward legitimate development activities. Ambassador Mark Wallace, the U.S. envoy for U.N. financial management, started writing to the UNDP's associate administrator Ad Melkert in mid-November, as Mr. Bolton was already busily defending his seat against Senate detractors. The paper said that the precise amount of money supplied is not known, but quoted one source as saying it could be as much as 100 million dollars. UNDP operations in North Korea cover humanitarian assistance, public health, the environment, agriculture and the economy. (Source: KBS News.) However, the UNDP downplayed the amounts stating that the amounts dealing with the DPRK amounted to "tens of millions" over a period of ten years not "a hundred million" as alleged by Ambassador Mark Wallace. In the latest letter, dated Jan. 16, Mark D. Wallace, the deputy United States ambassador for management, said that the United Nations Development Program's operation had been "systematically perverted for the benefit of the Kim Jong Il regime rather than the people of North Korea." Mr. Wallace said that local staff was dominated by employees of the repressive government, that the United Nations failed to conduct proper on-site audits and depended instead on "sham" ones by the Pyongyang government, and that all payments were made at the regime's demand in hard currency — dollars or euros — rather than won, the local currency. "Simply put," Mr. Wallace wrote, "in the absence of real audits and site visits, it is impossible for UNDP to verify whether or not any of the funds paid to the DPRK for supposed use in UNDP programs have actually been used for bona fide development purposes or if the DPRK has converted such funds for its own illicit purposes." (Source: New York Times.) The gist of the letter from US Ambassador Mark Wallace read:On 18 Jan, the Wall Street Journal reported that North Korea's regime took tens of millions of dollars in United Nations money intended for its Pyongyang office. After the report, UN Secretary General Ban Ki-moon met the associate administrator of the office, Ad Melkert, and vowed a thorough investigation. However, pundits stated that such extensive audits are easier to promise than to conduct. It was not clear how quickly or effectively Mr. Ban could impose his order across the range of United Nations agencies, many of which have differing auditing procedures and over which he does not have direct budget authority. They will take many years, cost a lot of money, and — as demonstrated in the case of the Volcker oil-for-food investigation — their results will not necessarily lead to significant changes. According to the NY Times, Mr. Melkert said that he welcomed the call for external auditing of his agency's activities. Asked about the American charge that funds might have been diverted to illicit ends, he said, "The audits have not given any reason for suspicion about money not being used for the purposes meant. Still, in order to make sure that there are no misperceptions or unintended consequences, we are supportive of an external independent audit." However, currently the UNDP accounts are examined in local audits that are given to the United Nations auditing board, which then decides what to transmit to the General Assembly. In essence, the UNDP "internal audits" are not open to member states viewing as other UN agencies are. Mr. Melkert downplayed the issue. He said, there was no reason to believe that programs were subverted in the DPRK. The UNDP has some 20 projects in the DPRK on economic, social, the environment and food management. Melkert said only a small part of the program was administered by the DPRK. UNDP spends some $2 million to $3 million a year in the DPRK, including $100,000 for local salaries. It has some 16 DPR Koreans and four international staff. The agency said the DPRK handled just $337,000 in UNDP funds over two years. Mr. Melkert said the UN office would in March stop all payments in hard currency to North Korean authorities and office staff members. Mr. Melkert noted on 19 Jan that other U.N. agencies, like the American-controlled U.N. Children Fund and World Food Program, also operate in North Korea like the UNDP. Mr. Melkert acknowledged that the agency's own internal auditors had raised "many concerns" about the DPRK programmes with management, and that "tough issues" remain to be addressed. In response, he said the agency would end all payments in hard currency to the Government, national partners, local staff and local vendors as of 1 March. Subcontracting of national staff via Government recruitment will also be discontinued. Monitoring and audit systems will be put in place "addressing the issue of national execution." (Source: Scoop.co.nz.) On 25 Jan, the executive board of the UNDP suspended budget approval for its North Korean operations, pending the results of a probe into the allegations that it funneled funds to the Kim Jong-il government. The UNDP said in a statement that its board suspended approval of the $17.9 million 2007-09 budget for its North Korean program, saying that hard currency payments to and recruitment from the communist government would end by March 1. The Wall Street Journal reported that the Kim Jong-il regime is suspected of misappropriating tens of millions of dollars from the United Nations Development Program office, which opened in 1997 in Pyongyang. The Journal report quoted a letter to Mr. Melkert from Ambassador Mark Wallace of the U.S. Mission, saying the UN office in Pyongyang operated in blatant violation of UN rules, [and] served as a steady and large source of hard currency for the Kim Jong-il regime. The UN has spent an estimated $27 million at its Pyongyang office since 1997. That includes $2 million per year for rent, which other UN offices throughout the world do not pay, the report said. North Korea is also suspected of taking money allocated for the local staff's food expenses, according to the report. Washington reportedly urged the UN Development Program to suspend all North Korean projects until a complete level of transparency could be guaranteed. (Source: Joongang Ilbo.) DPRK Accuses US of Dirty Politics (Jan 2007) Reuters on 25 Jan reported that the DPRK accused the US of a "smear campaign" after Washington said UNDP money may have been diverted to build nuclear weapons. Mark Wallace, the U.S. envoy for U.N. financial management, accused the UNDP in a letter of violating rules by hiring North Korean government officials and by paying salaries in cash through the government. "As the UNDP has denied, the U.S. assertions...are a sheer fiction," said a DPR Korean spokesman. Washington is also considering a proposal that the U.N. stop all programs in the North except those for humanitarian assistance, the Yonhap New Agency on 26 Jan quoted Alejandro Wolff, acting U.S. envoy to the United Nations, as saying. He said the U.S. was satisfied with UNDP's announcement of steps to remedy the situation, including an audit and readjustment of its 2007-09 North Korea program. "In the meantime, until we get the results of that audit and the program is reviewed, we would defer approval of the new program for the DPRK," the envoy was quoted as saying, referring to the North by the shorthand of its official name, the Democratic People's Republic of Korea. "The United States also withholds its contribution in part to UNDP to the DPRK program," he said. In a related move, Kyodo News reported on 24 Jan that the US urged the U.N Population Fund (UNFPA) to conduct a comprehensive audit of its programs in the DPRK. The move came after the 36-member executive board of the U.N. agency approved an $8.35 million aid program for the DPRK, focusing mainly on reproductive health, population and development issues, for a three-year period from 2007. The U.S. representative, expressing deep concerns over the humanitarian situation in the DPRK, also called for the UNFPA to make all audits available to the executive board members. Japan also sought close monitoring of implementation of the programs in order to ensure that "maximum benefits are delivered to the neediest individuals, in particular women and youth." (SITE NOTE: The US is going after every source of income of the DPRK to squeeze it -- just as it squeezes the ROK. Any deal amounting to transferring Hard Cash to the North will be "leaked" to the media. The DPRK is reeling from its economic squeeze and offered Russia a $8 billion deal for uranium mining rights and port use in exchange for its debt relief.) In another report it appears the economic squeeze is working. Associated Press on 25 Jan reported that the DPRK had banned the use of foreign currency in all domestic transactions in an apparent attempt to collect hard currency from individuals amid international economic sanctions over its nuclear test. The ban was announced on 22 Jan and took effect immediately, the Dong-a Ilbo newspaper reported, citing unidentified "reliable sources" familiar with DPRK affairs. Foreign money can be exchanged for DPRK currency at government-designated booths, it said. However, the North has a black market for currency where the unofficial rate is many times higher than the government-set rate. Before the ban, foreign currencies, such as the U.S. dollar and euro, could be used at stores in capital Pyongyang and other major cities. UNDP Suspends Operations in North Korea (Mar 2007) The UNDP has announced that it will suspend its operations in North Korea. In a statement released March 3, the UNDP said that it had no choice but to suspend its operations in North Korea as of March 1 as conditions set out by the organization's executive board on Jan. 25 have not been met. On Jan. 25, the U.S. demanded that the organization change its practices in North Korea, arguing that UNDP operations there are being used to funnel support for the development of nuclear weapons. At that time, the UNDP said it would review its plans for the next three years for North Korea and establish new operating practices after an audit was done. In this regard, the UNDP notified Pyongyang that it would stop making payments in Euros and review its hires of North Korean employees. When North Korea did not accept these changes, the UNDP decided to halt is operations there. UNDP support for North Korea totaled US$2.1 million in 2005 and $3.2 million in 2006. Funds were spent on developing public hygiene, the environment, agriculture, and the economy and 20 other areas. In addition to the UNDP, the UN has begun to audit other subsidiary aid organizations working in North Korea, including the World Food Program and the United Nations International Children's Fund. The operations of these bodies in North Korea may be suspended or cut according to the results of the audit. The Washington Post on 6 Mar reported that the decision to halt the $3.7 million-a-year program represented an awkward situation for the DPRK as it prepared for its highest-level talks with the United States on American soil since 2000. The UNDP executive board decided Jan. 25 to restrict payments to local staff and businesses to DPRK currency, the won, and to halt its practice of hiring local aid workers from a government-controlled roster. Pyongyang has a seat on the agency's executive board but did not have the power to block its decision. U.N. officials warned that it was unlikely that they would be able to recruit local labor, and on 8 Mar, the DPRK's U.N. ambassador, Pak Gil Yon, rejected the board's terms in a meeting with UNDP Associate Administrator Ad Melkert. The decision will immediately shutter 20 UNDP operations, but eight international workers who manage the program will remain in Pyongyang for a few days to see whether the government backs down. The UNDP's action will have no impact on other U.N. humanitarian operations in the DPRK, senior U.N. officials said. UNDP was ATM Machine for DPRK According to the Chicago Tribune on 11 Mar produced a damning article that showed the UN allowed the North Koreans to sign the checks that were picked up by North Koreans daily from the agency office in Pyongyang while keeping the UN staff virtual prisoners -- and unable to even inspect the projects that the moneys were supposedly used for. At the UNDP office in Pyongyang, a North Korean official wearing a standard-issue dark windbreaker and slacks would come to the door each business day. He would take a manila envelope stuffed with cash--a healthy portion of the UN's disbursements for aid projects in the country--and leave without ever providing receipts. According to sources at the UN, this went on for years, resulting in the transfer of up to $150 million in hard foreign currency to the Kim Jong Il government at a time when the United States was trying to keep North Korea from receiving hard currency as part of its sanctions against the Kim regime. "At the end, we were being used completely as an ATM machine for the regime," said one UN official with extensive knowledge of the program. "We were completely a cash cow, the only cash cow in town. The money was going to the regime whenever they wanted it."DPRK Asks UNDP to Withdraw Two Remaining Staff Members (Apr 2007) Associated Press reported on 24 Apr that the DPRK requested the U.N. Development Agency to withdraw its two remaining staff members but the UNDP had already planned to recall them. They will leave Pyongyang on May 3. The agency suspended operations on March 1 because the DPRK failed to meet conditions set by its board following U.S. allegations that U.N. aid money was being diverted to Kim Jong Il's regime. It withdrew seven of its nine international staff in mid-March. In late March, UNDP announced that U.N. and U.S. authorities are investigating how $3,500 in suspected counterfeit $100 bills ended up sitting in a safe in the UNDP office in the DPRK for 12 years. Audit report does not find large-scale U.N. fund diversion in North Korea (Jun 2007) A preliminary audit report on U.N. aid activities in North Korea does not indicate large-scale funding diversion as alleged, but has found some practices not in keeping with operations elsewhere in the world, a U.N. spokesperson said on 1 Jun. The U.N. Board of Auditors submitted the report in what is expected to be the first in a series of follow-ups looking into claims first lodged in January that the U.N. Development Program (UNDP) ended up funneling massive amounts of cash to Pyongyang by paying cash to locally hired employees and North Korean contractors. U.N. Secretary-General Ban Ki-moon immediately asked for an across-the-board audit of North Korea operations by U.N. agencies, including the UNDP, the U.N. Children's Fund and the U.N. Population Fund. In the meantime, the UNDP suspended its 2007-2009 program in North Korea pending the results of the inquiry and said it would stop paying cash to local workers from March 1. The U.S. mission had charged that the UNDP violated rules by dispensing hard currency and accused the aid agency of lax monitoring in ensuring that the assistance was reaching the targeted population. Some press reports said the diversion amounted to hundreds of millions of dollars. "It should be noted that the report does not indicate that large-scale U.N. funding has been systematically diverted, as has been alleged," U.N. spokesperson Michele Montas said in a statement. But the report does identify practices "not in keeping with how the U.N. operates elsewhere in the world" in terms of independence of staff hiring, foreign currency transactions and access to local projects, she said. The secretary-general "does expect the agencies to act upon the findings in the audit as quickly and transparently as possible," the spokesperson said. More follow-ups would be required, she said, and Ban will write to relevant committees to request the auditors to continue their work, including a visit to North Korea. The UNDP issued a separate statement saying it was encouraged by the report's findings, which said the agency's operation in North Korea involved US$2 million to $3 million rather than hundreds of millions as suggested, and that the agency staff did regularly visit project sites. "The report highlights areas in which UNDP rules or procedures could be strengthened," it said. "UNDP is committed to addressing these areas." (Source: Hankyoreh News: Yonhap News.) North Korea Purchased Real Estates with UNDP Funds (Jun 2007) On 11 Jun it was reported that suspicions had been raised that millions of dollars offered by United Nations Development Program (UNDP) to develop North Korea and relieve its poverty were spent to acquire overseas real estate and purchase equipment that can be used for military purposes. The Washington Post reported the above Saturday, citing a private report delivered to Congress by the U.S. State Department after an in-house investigation. The report was released just after the UNDP had conducted an inspection for the first half of this year, as it was reported that a large amount of the UNDP's funds had been presented to the North without transparency. The UNDP had reached a primary conclusion that "although it was noticed that North Korea had violated some regulations, including hiring employees appointed by themselves, it was inevitable based on the international practices." The UNDP has provided $3 million per annum on average over the past 10 years, totaling about $30 million. According to the newspaper report, the UNDP delivered financial aid amounting to over $8 million for North Korea on behalf of other United Nations organizations, apart from its own funds. State Department investigation results showed that the North sent $2.8 million out of the total amount to cover housing expenses for its official residences located in New York and western countries. The State Department wrote in the report, "The money was used to buy the official residences in France, U.K., and Canada." The State Department also found out that the UNDP had bought the North computers, Global Position System (GPS) equipment, and a mass spectrometer for isotope tests. The State Department underlined that such equipment could be converted for military purposes. It was also reported that $2.7 million of the UNDP fund had flowed into Dancheon Commercial Bank (Changkwang Credit Bank), against which the White House applied sanctions on account of the bank's involvement in ballistic missile and parts transactions in 2005, under the name of "product and equipment procurement." (Source: Donga Ilbo.) Agence France-Presse reported on 9 Jun that US diplomats have confronted the UN Development Program (UNDP) with new allegations that its funds were misused and improperly diverted by the DPRK. The US mission to the UN essentially confirmed a report in Saturday's Washington Post citing US charges that nearly three million dollars in UNDP aid was used by the Pyongyang regime to buy property in France, Britain and Canada. But in a statement released by its spokesman David Morrison Saturday, UNDP said : "the allegations do not correspond to our records, which we have examined very carefully over the past six months." UN Ethics Chief Evidence Supports Probe in Former UN Employee's Claims of Retalition (Aug 2007) Associated Press on 20 Aug reported that the U.N. ethics chief said there was enough initial evidence to support an investigation into claims by a former U.N. employee that he lost his job in retaliation for concerns he raised about his agency's work in the DPRK. The head of the U.N. Ethics Office, Robert Benson, said in the confidential letter obtained on 20 Aug by The Associated Press, however, that his review of the case had turned up enough initial evidence of possible retaliation to warrant a further investigation. N. Korea used UN-linked accounts for arms sales: US probe (Jan 2008) Nuclear-armed North Korea used UN-linked bank accounts to secretly transfer funds in connection with alleged weapons sales, a US Senate probe showed on 24 Jan. The investigation was held following media reports last year about alleged mismanagement in the operations in North Korea of the United Nations Development Program (UNDP), the largest UN development agency. (See UNDP Senate Report for full report. The report recommends the UNDP provide UN member states "with unfettered access to financial and management audit reports about UNDP activities." Further the UNDP should "ensure that whistleblowers do face retaliation." Also the UNDP should take steps to ensure that its name and resources are not used as a cover for non-UN activities and that before making payments to vendors should verify that the vendor is not associated with illicit activity.) The probe discovered that the UNDP operations in the hardline communist country "did not follow" standard policies and were "undermined by management and operational deficiencies," said Senator Carl Levin, head of a panel that conducted the inquiry. Many of the "deviations" in the UNDP, which suspended operations in North Korea last year, stemmed from demands by the government in Pyongyang, he said at a Senate hearing on the issue on 24 Jan. Pyongyang, for example, pushed the UNDP to conduct its financial transactions using the North Korean state-owned Foreign Trade Bank, he said. But the UN agency had no access to the bank account records, said the Democratic lawmaker chairing the permanent Senate panel on investigations. UNDP was "surprised to learn" that the bank had routed some outgoing UNDP funds through a Chinese firm, International Finance and Trade Joint Company (IFTJ), with links to alleged weapons sales, Levin said. But much of the hearing focused on charges made last year by Mark D. Wallace, an ambassador at the United States mission to the United Nations, in briefings for members of Congress, news outlets, the State Department and nations that finance the development program. Wallace said then that $2.8 million of program funds had been sent to North Korean missions abroad for the purchase of buildings in Britain, France and Canada; that $2.7 million had been paid to a North Korean financial agent responsible for sales of missiles and arms; and that more than $7 million had been transferred to a North Korean committee it worked with. Wallace compared the program to the scandal-ridden oil-for-food program in Iraq and suggested that the United Nations money might have ended up financing the North Korean nuclear program. The subcommittee staff report on Thursday said that in fact the $2.8 million sent abroad to buy real estate was actually North Korean, not United Nations, money, and that the amount of money sent to the company suspected of financing arms was $52,000, not $2.7 million. It also accepted the program's explanation that the link to arms sales of the suspect contact, the Macao-based Zang Lock Trading Company, had not been known at the time. (Source: International Herald Tribune.He said "two UN payments totalling about 50,000 dollars, that had been made by UNDP on behalf of other UN agencies, had gone to an entity that the State Department later linked to North Korean weapons sales," including ballistic missiles. The probe showed that the transaction was made through an IFTJ account in Banco Delta Asia, a bank in the Chinese enclave of Macao which was hit with US-led sanctions in 2005 for allegedly acting as a clearing house for illicit North Korean financial dealings. UNDP officials told the Senate panel that they had no knowledge of such a connection at the time the payments were made, an extensive probe report said. UNDP said in a statement at the hearing on 24 Jan that when the State Department alerted the agency that Chinese entity Zang Lok, which received the payments, had ties to a North Korean group with links to Pyongyang's armaments program, "UNDP immediately agreed to cease doing business with" the entity. The Senate probe also found that in 2002, Pyongyang "used its relationship with the United Nations to execute deceptive transactions" by moving 2.72 million dollars of its own funds to North Korean diplomatic missions abroad through a UNDP-linked account. North Korean officials interviewed in the probe said their foreign affairs ministry "used the UNDP-related accounts as a secure channel for transferring its own funds, apparently because it was less likely to incur international scrutiny and be frozen," Levin said. North Korea has been under international scrutiny for years over its nuclear weapons program as well as other reported illicit activities. Some media reports had suggested that the UNDP might have supplied more than 100 million dollars in hard currency to North Korea. The UNDP suspended operations in North Korea in March 2007 and withdrew from the impoverished country a month later after Pyongyang refused to allow the agency to impose tighter controls on its activities. UNDP told the probe team that the 100 million dollar figure was "impossible" since the agency's total expenditure during the 1995-2005 period in North Korea did not exceed about 33.5 million dollars, of which only about 400,000 dollars was transferred to Pyongyang's account for use on development projects. The probe team "is unable to confirm these estimates through its own analysis" since key financial records remained in Pyongyang, Levin said. A UNDP commissioned external audit, led by former Hungarian prime minister Miklos Nemeth, is now underway and a final report was expected in March. "There appears to be little reason to believe that the figure of upward of 100 million dollars that appeared in the press will be sustained," Levin said. (Source: Yahoo News: AFP.) |
