Wednesday, March 23, 2011

Zooming Down a Reuters Wormhole

Alright, I've got a very minor mystery for you. Basically, this morning Reuters ran an article about some new violations of UN Resolutions pertaining to Iran, in which it stated North Korean culpability. Here is an article about it from the UN Security Council website, which references the case but is short on detail.

The interesting thing is that shortly after I read the Reuters piece and while I was still in the process of writing about it, Reuters took the original article down and it has never gone back up.

What to make of it is up to you. In order to help you decide, the newsworthy part of my work is below, and here is the only other article in existence on the subject; it is from the Jerusalem Post, and cites the orginal Reuters piece.

North Korea and Iran are continuing to try and circumvent UN Security Council sanctions in place against them, it was revealed in a regular sanctions meeting in New York yesterday.

A case involving North Korea was one of two fresh violations presented to a committee charged with overseeing the enforcement of sanctions against the Middle Eastern country and apparently involved an attempt by Pyongyang to sell aluminum powder to Tehran.

Although the details were not revealed publicly by the committee, currently chaired by Ambassador NĂ©stor Osorio of Colombia; the facts were later revealed to Reuters by another UN diplomat.

"The aluminum powder was from North Korea and interdicted by Singapore," the diplomat is quoted as saying.

In the other case, the diplomat said that phosphor bronze had been exported by a Chinese company but interdicted in South Korea.

According to Reuters, other diplomats subsequently confirmed both cases.

Tuesday, March 22, 2011

The Demonstration Effect Cuts Both Ways

It doesn't take a genius to realize that the international community's decisive action against Libya will convince Kim Jong Il that the choices he has made over the last 30 years have been vindicated.

No, there is little doubt that if Colonel Qadhafi had gone further, jumped higher, lied more, worn slightly higher shoes, slightly less ridiculous clothes and flown just a little lower under the international radar for a few years longer, he too could be sitting pretty in his Tripoli palace atop a small pile of nuclear bombs of highly suspect reliability and almost certainly complete undeliverability but that would, as night surely follows day, have stopped his now practically inevitable fall from power.

Yes, Kim will amble to his little book of political lessons well learned, pick it up in his good hand and, as Reudiger Frank notes in his piece for 38 North, write the name of the presumably soon to be jobless Colonel Muammar Al Qadhafi next to Mikhail Gorbachev and Saddam Hussein on his list of leaders who tried to play with the west, and ended up getting burned bad.

It requires little imaginative power to see what conclusions will be drawn in Pyongyang. If there was anybody left at all in the elite who would dare try to persuade his leaders to sit down with the West and find a way to denuclearize, he will now be silent. Those who thought that the economic price of the military-first policy was too high will stand corrected. Not yielding an inch on the nuclear question will continue to be the key paradigm of North Korea’s foreign policy for the foreseeable future.

Indeed so. Or, to put it another way;

Hey, remember when Bush Administration officials tried to convince Kim Jong Il that he could get the same denuclearization deal Bush gave Qadhafi?

Yeah, the last couple of days might explain why Kim didn’t think it was such a great idea.

But must we continue to look at it this way? Such activities get us nowhere; they frustrate. Instead, how about this;

News of the recent attack on Libya by a coalition of countries is spreading in the jangmadang thanks to traders coming in from China, leading North Korean people doing business there to wonder whether, if they were to rise up and make enough noise, the international community might come to their aid. As a result, sources report that a number of groups have begun to consider ways to launch protests in big regional cities...

You get the idea, and yes of course I made it up. It is a distant aim, too, but let us be clear; we know exactly how to get this information to those people who need to hear it, because we've been talking it over since at least March 26th, 2010, when North Korea put a torpedo through a South Korean naval corvette and killed 46 conscript sailors.

So let's not remember the first anniversary of the Cheonan in silence, then. How about making a little bit more noise of our own?

Sunday, March 13, 2011

A Suspicious Death in Mia-dong

Nobody likes a peddler of implausible rumor, a weaver or believer of conspiracy theories, a conceiver of the inconceivable, a... anyway, suffice it to say that I hope I have built a sufficient reserve of goodwill within the North Korean studies community to be able to point out that this is a bit suspicious.

For your information, the English translation team at Yonhap saw fit to make it look like this, but, not least since they took leave of an oddly graphic description of the death itself in the process, here is my translation of the Korean original;
The mother of the general secretary of a conservative organization which sends leaflets into North Korea has been murdered. In the light of this, an upcoming leaflet release event has been cancelled.

According to Seoul police, "At approximately 3:20PM on the afternoon of the 10th in Seoul, Gangbuk-gu, Mia-dong, a neighborhood shop owner found Mrs. Han (75) dead in her store and called 119 to report it." Mrs. Han was the mother of Mr. Chu (52), the general secretary of one of three leafleting organizations.

Rescue workers report that Mrs. Han collapsed against a wall after receiving a blow to the head, smearing blood on the wall. Someone connected with the police said, "It is being treated as homicide so an investigation is underway, but I can say that nothing had been stolen so it doesn't appear to have been a robbery."

Meanwhile, according to the general manager of the conservative organization itself, "The wind was looking good, so we were intending to hold a leaflet launch on the morning of the 12th at 10AM, but it has been cancelled. This is not just a delay of a few days, we will wait for the official investigation (into whether or not it was a terrorist attack) results to be announced."

The conservative organization has, however, affirmed that it will conduct the leaflet launch in due course.

The police are testing fingerprints and hair found at the scene to try and establish what really happened to Mrs. Han.
It is not for me to shout from the rooftops that Mrs. Han was murdered by North Korea or its South Korean proxies, let that be clear. I don't know who did it, obviously, any better than you do. However, it is odd and it does come at a time when North Korea (via KCNA, 2/27/11) is clearly pretty uncomfortable with outside propaganda efforts against it;
If the psychological warfare activities were to continue, decisive action on the basis of self-defense would be taken, including a direct attack on Imjingak and other sources of anti-Republic psychological plotting activities.
If North Korea's doing, this murder would be, I'm afraid, a direct attack on Imjingak, and as plausibly deniable warnings to such organizations go, hitting a member of the family of an outlier seems like a smart choice (Mr. Chu's organization is of the shoutier, more militant sort, or so my leafleting friends assure me, and so its leader's mother would have been suitable for this role).

On the other hand, of course, plenty of murders occur in South Korea annually even without the shadowy presence of North Korea's ideological hand, and this could have simply been one of them.

Nonetheless, if it were to appear likely that North Korea "did it", it would raise some interesting questions about the efficacy of Seoul's current policy of very public deterrence and the ability of the Lee administration to carry that policy through to its logical conclusion.

Since the Cheonan, and in particular since Yeonpyeong Island, South Korea has set out its public stall very firmly; if you attack us, we will retaliate hard. There is even a four-star general at the top of the Ministry of National Defense.

And it all sounds fair enough, really; after all, more than 50 South Koreans have been murdered by North Korea in the last year, and that would not be acceptable for any nation.

But, problematically, it is a good deal harder in practice to state clearly where the red lines for retaliation actually are; I mean, if it comes to pass that this murder was done on the say-so of North Korea, what does the South then do?

Obviously, starting a war on the basis of the murder of the mother of the leader of one of the more right-of-center NGO groups out there would be, in and of itself, exceedingly foolish. The days of Unit 684 have also, I presume, passed.

All of which would, then, tend to lead to a policy of not rocking the boat. And such a policy, given that it would be completely at odds with the official policy of deterrence and instant retaliation, would lead directly to a government cover-up.

And that, given that it would stand a high chance of leading to fissures in public and governmental opinion, would be ideal for North Korea. Furthermore, it would prove to Pyongyang yet again that South Korea is toothless in most cases to retaliate against its provocative behavior, and encourage more of the same.

Friday, March 4, 2011

"5.4% Interest from the Central Bank?"

Since this newspaper does not have an English site, I thought people with one eye on the economic pulse of North Korea would want me to translate this;

The Chosun Central Bank is said to have raised interest rates by 1.8 times. Customers are also now able to get instant access to their money. As a result, the bank's total deposits are also said to be growing.

These measures appear to be the bank coming forward to guarantee deposits given that people have been unwilling to put their money there since the 2009 currency redenomination.

North Korea watchers are observing the situation, saying that there is a chance that measures like these could be an indicator of financial sector reform.

Speaking on the 1st, one such source said, "I hear that the number of people putting their money in the bank is growing. The total reserves of the Chosun Central Bank are also growing. The causes of this are that access to withdrawals has recently been freed up and the interest rate has risen steeply." According to the source, the interest rate offered by the bank was previously 3%, but has recently risen to 5.4%.

The Chosun Central Bank is a government entity under the Cabinet, doing the job of both a central and commercial bank at the same time. It offers savings, loans and insurance services.

North Korean people can deposit money there and earn interest on it; in this, it is much the same as the Post Office, which also takes deposits and gives interest.

In terms of allocation in North Korea, the state does it by force, and there are also cases of deposits being coerced. Indeed, until now it has been hard for North Korean people to recover capital deposited with the bank.

The source explained, "At times when the economic situation has been bad, it has not just been hard to get interest, it has even been common to illegally have to give 20% of the value of the capital to Central Bank management and then take the rest," but added, "Recently, North Korean people have been able to get hold of their deposits surprisingly easily, and the rumor 'We can get our money! And the interest has gone up!' is going around."

Cho Byung Hyun of the Industrial Bank of Korea's research institute explained more, saying, "Following the failure of the 2009 currency redenomination, people disliked putting their money in the bank so, for the circulation of money, the bank instituted a policy of allowing instant access to deposits and raising interest rates."

North Korea suffered serious fallout from the currency redenomination, including rapidly rising prices and the execution of its architect, former Workers' Party financial planning head Pak Nam Gi.

However, it is also possible in part to interpret the failed redenomination as an opportunity to activate capitalist banking practices.

Cho went on, "We know North Korea has recently been preparing financial reforms. At the moment, banks under existing trade banks etc are controlled by the Central Bank, but this can be seen as propelling reform in the direction of giving independence to each bank."

Meanwhile, Professor Lee Sang Min of Joongang University economics department pointed out, "This can be seen as helping with the introduction of a capitalist system in North Korea in the long term. It is an opportunity for the North Korean people to learn about a capitalist banking system."

However, it is as yet too early to see this sort of phenomenon as meaning that the financial system of North Korea is settled. As one defector pointed out, "For this to develop into a system, the North Korean authorities shall have to spend a long time building trust."
Actually, there is one more paragraph, but that last one was so clearly the better end that I wanted to divide them. Nevertheless, here it is;
Another North Korea source added, "The dollar tended to be thought of by the North Korean people as the standard currency, but the Yuan is gradually moving to center stage." This is analyzed by experts as being down to recent economic exchanges between the North and China and the rising value of the Yuan.
Anyway, if true (and the usual caveats do apply, in my opinion extremely strongly) then it is an interesting piece, one which at the very least lends credence to the notion that North Korea is a land of extreme inequality. But it is also evidence of the fact that for some there is money available, and, along with news of the rush into Rasun, there is now a narrative which says that, in Pyongyang and among the upper echelons of the Party, state, military and indeed the markets, money is being made and spent.

Note I am planning to raise this with some high(ish) rolling former cadre sorts tomorrow, and see what they think. The jury is, then, out.


My source said that it is perfectly feasible that money earned through trade is being deposited, and that this is being encouraged via higher interest rates. However, he pointed out that the story will only be true for the trading activities of enterprises and government organs, which in any case makes up at least 80% of trading activity in North Korea today.

In the case of the other 20%, which can be seen as encompassing the economic activities of individual market traders, private farming and illegal payments made between individuals, he said there is still "absolutely no chance whatsoever, under any circumstances," that they would willingly deposit their money with the Central Bank.

Which, given that the self-same bank was the primary vehicle in the expropriation of the majority of most small- and medium-sized traders' assets just 16 months ago, makes a lot of sense.