Economy, economic policy, trade, and business

2019
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Articles on current developments, compiled by Tim Beal.
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DECEMBER 2019

• Korea Business News November 2019
  Hyesan-Samjiyon Railroad Opens to Traffic
  The Hyesan-Samjiyon railroad has been brought to completion. A ceremony of opening it to traffic took place at the Wiyon Youth Railway Station. Present at the ceremony were Premier Kim Jae Ryong, member of the Political Bureau of the Central Committee of the Workers' Party of Korea and member of the State Affairs Commission of the DPRK, officials concerned, commanding officers and shock brigade members of the railroad construction brigade under the 216 Division, officials of the Hyesan Railway Branch Bureau, labour innovators and working people in Hyesan City. [Railway]

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OCTOBER 2019

• N.Korea Failed to Repay Huge Debts from Seoul
  By Kim Myong-song October 15, 2019 13:33 North Korea has repaid South Korea only W2.8 billion out of various soft loans amounting to more than W1 trillion it has taken since 1991 (US$1=W1,186). Liberty Korea Party lawmaker Shim Jae-cheol made the claim on Monday based on analysis of the Export-Import Bank of Korea data. According to Shim, the total amount of soft loans given to the North from the Unification Ministry's Inter-Korean Cooperation Fund, which the bank has managed since 1991, has reached US$933 million (about W1.11 trillion). That consists of $720 million for several shipments of food between 2000 and 2007, $133 million for a shipment of materials and equipment in 2002, and $80 million for a shipment of light industry raw materials in 2007. But the North paid back only $2.4 million in kind, including zinc, in December 2007 and January 2008. That is a mere 0.25 percent. The total unpaid principal balance plus interest was $981 million as of the end of September. [SK aid] [Debt] [Loans]
• Seoul mulls discussing North Korea development bank at ASEAN summit
  Posted : 2019-10-09 16:24 Updated : 2019-10-09 18:48 Cheong Wa Dae and the Ministry of Foreign Affairs are about to begin selecting agenda items for South Korea's special summit with ASEAN in Busan from Nov. 25 to 26. Yonhap By Yi Whan-woo South Korea is considering adding the establishment of a development bank exclusively for North Korea to the agenda for its special summit with ASEAN scheduled to take place in Busan next month, according to multiple sources, Wednesday. The idea of establishing the bank, estimated to be worth 1 trillion won ($835.7 million), was first proposed by Busan Mayor Oh Keo-don to President Moon Jae-in in mid-February during Moon's visit to Busan. The sources from Cheong Wa Dae, the Ministry of Foreign Affairs and Busan Metropolitan City said the first two organizations are about to begin selecting agenda items in consultation with ASEAN and are taking Oh's ideas into account. Analysts, however, were skeptical about the government's move. They argued the denuclearization dialogue efforts have been jeopardized since Oh's proposal, as seen from the collapse of the second U.S.-North Korea summit in late February, Pyongyang's return to missile tests and the breakdown of its working-level talks with Washington last week. Moreover, North Korean leader Kim Jong-un has not responded to the invitation to attend the South Korea-ASEAN summit to celebrate their 30 years of relations. The Moon Jae-in administration is still optimistic about Oh's idea, a source said, because it is in line with Moon's "peace-driven" economy that underscores cross-border cooperation. It said the government can possibly mobilize the Korea Development Bank, Export-Import Bank of Korea and other state-run financial institutions to raise funds accordingly. [Detente] [Finance] [Wishful thinking] [US dominance]
• Moon vows to invite multinational firms to Gaeseong complex
  Posted : 2019-10-04 17:19 Updated : 2019-10-04 18:03 By Kim Yoo-chul President Moon Jae-in vowed Friday to invite foreign companies to set up affiliates at the Gaeseong Industrial Complex (GIC) in North Korea if operations there are resumed. "If operations at the Gaeseong complex resume, I will try to make it a place that houses multinational companies," President Moon said at the start of a luncheon with businesspeople at Cheong Wa Dae, according to press pool reports. The President appeared to be responding to remarks by Kim Ki-mun, head of the Korea Federation of Small- and Medium-sized Enterprises (SMEs), calling for the complex to be reopened to help small local businesses. Many of these are in a dire financial straits due to their investment in the complex, and a lack of new growth engines. The GIC was once at the heart of South-North rapprochement during the "sunshine policy" of former President Kim Dae-jung. It was opened in 2014, but was forced to shut down following Pyongyang's fourth nuclear test. The comments come against the backdrop of the U.S. and North Korea resuming working-level denuclearization talks in Sweden that may eventually yield results and a third Trump-Kim summit. Earlier, reports surfaced that Washington was willing to allow "low-level" sanctions relief including the partial resumption of tours to Mount Geumgang in order to facilitate the nuclear disarmament talks. Cheong Wa Dae refused to comment on President Moon's remarks. Previously, Moon Chung-in, a presidential adviser on unification and diplomacy affairs, said in forum that a resumption of the Mount Geumgang tourism project and other frozen inter-Korean economic projects was possible. [Kaesong] [MNC] [FDI] [Moon Jae-in] [US dominance] [Wishful thinking]
• The Disaster of Negative Interest Rates
  By Ellen Brown Global Research, September 30, 2019 President Trump wants negative interest rates, but they would be disastrous for the U.S. economy, and his objectives can be better achieved by other means. The dollar strengthened against the euro in August, merely in anticipation of the European Central Bank slashing its key interest rate further into negative territory. Investors were fleeing into the dollar, prompting President Trump to tweet on Aug. 30: The Euro is dropping against the Dollar “like crazy,” giving them a big export and manufacturing advantage… And the Fed does NOTHING! When the ECB cut its key rate as anticipated, from a negative 0.4% to a negative 0.5%, the president tweeted on Sept. 11: The Federal Reserve should get our interest rates down to ZERO, or less, and we should then start to refinance our debt. INTEREST COST COULD BE BROUGHT WAY DOWN, while at the same time substantially lengthening the term. And on Sept. 12 he tweeted: European Central Bank, acting quickly, Cuts Rates 10 Basis Points. They are trying, and succeeding, in depreciating the Euro against the VERY strong Dollar, hurting U.S. exports…. And the Fed sits, and sits, and sits. They get paid to borrow money, while we are paying interest! However, negative interest rates have not been shown to stimulate the economies that have tried them, and they would wreak havoc on the U.S. economy, for reasons unique to the U.S. dollar. The ECB has not gone to negative interest rates to gain an export advantage. It is to keep the European Union from falling apart, something that could happen if the United Kingdom does indeed pull out and Italy follows suit, as it has threatened to do. If what Trump wants is cheap borrowing rates for the U.S. federal government, there is a safer and easier way to get them. [Negative interest rates] [EU] [False analogy] [Trump]
• Korea Business News September 2019
  The 15th Pyongyang Autumn International Trade Fair opened at Pyongyang Indoor Stadium on September 23. The fair draws more than 350 companies from the DPRK, China, Vietnam, Mongolia, Indonesia, Italy and other countries. On display there are electrical and electronic goods, building materials, machines and light industrial products. Its opening ceremony was attended by Ri Ryong Nam, vice-premier of the Cabinet, Kim Yong Jae, minister of External Economic Relations, delegations from different countries and members of foreign diplomatic missions in Pyongyang. Pak Ung Sik, director of the Korean International Exhibition Corporation, delivered an opening address to be followed by a congratulatory speech by O Ryong Chol, vice-minister of External Economic Relations. [Photos] [Economy]

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SEPTEMBER 2019

• LG Economic Research Institute offers gloomy forecast for South Korea’s growth in 2020
  Posted on : Sep.29,2019 14:36 KST Modified on : Sep.29,2019 14:36 KST Researchers predict slowdown in global economy leading to reduced domestic consumption 　 Amid gloomy predictions of South Korea’s economic growth rate hovering around the 2.0% range next year, a private research institution released projections putting it even lower in the 1.5–1.9% range. Experts also predict that domestic consumption will decline next year as a continued slowdown in the global economy leads to reduced exports and investment returns. “The domestic economy has exhibited an even faster loss of growth momentum than the global economy this year,” the LG Economic Research Institute (LGERI) said in a “2020 Domestic and Overseas Economic Forecast” released on Sept. 26. “With the slowdown in global trade volumes predicted to continue and the semiconductor industry unlikely to bounce back, the growth rate for the South Korean economy is predicted to decline to 2.0% this year and 1.8% next year,” it said. [Economic growth] [Trade war] [Collateral [Forecast]

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AUGUST 2019

• Korean Car Production Plummets to Historic Low
  By Yoon Hyung-jun August 19, 2019 13:36 Korea's car production will fall to the lowest in 16 years this year amidst declining demand. According to performance reports by Hyundai, Kia and Ssangyong on Sunday, the three companies produced 1.73 million cars in Korea in the first half of this year, down 1.6 percent from a year ago and 3.7 percent from two years ago. The major reason is decreasing demand, which fell to some 730,000 cars in the first half of this year, down 6.1 percent on-year. . [Auto]
• Pyongsong Startup Festival (with PY Ventures)
  Saturday, November 16, 2019 9:00 AM Saturday, November 23, 2019 10:00 AM Google Calendar ICS UPDATED- NEW DATES CONFIRMED While Pyongyang is North Korea's increasingly glitzy capital, the city of Pyongsong is a major trading hub that is home to many smart entrepreneurs who are working on business ideas for the domestic economy. If you have a background in marketing, finance, management, startups, or related fields, join our Pyongsong Startup Bootcamp and share your skills! The trip includes site visits in Pyongyang and Pyongsong that help understand entrepreneurship in the DPRK, and an interactive three-day workshop for North Koreans who are trying to start a business. Get in touch to learn more! This program is sponsored and organized by PY Ventures, with Choson Exchange as an implementing platform. [Marketisation] [Entrepreneur]
• Explainer: Countdown to recession - What an inverted yield curve means
  Richard Leong, Dan Burns, Karen Brettell The spread between yields on U.S. two-year and 10-year notes, a closely watched metric, is likely to invert for the first time since 2007. That would follow the inversion of another part of the yield curve earlier in the year. Here is what that means. FILE PHOTO: A trader looks on as a screen displays the U.S. Federal Reserve interest rates announcement on the floor of the New York Stock Exchange (NYSE) in New York, U.S., July 31, 2019. REUTERS/Brendan McDermid/File Photo WHAT IS THE TREASURY YIELD CURVE? The yield curve is a plot of the yields on all Treasury maturities - debt sold by the federal government - ranging from 1-month bills to 30-year bonds. In normal circumstances, it has an arcing, upward slope because bond investors expect to be compensated more for taking on the added risk of owning bonds with longer maturities. When yields further out on the curve are substantially higher than those near the front, the curve is referred to as steep. So a 30-year bond will deliver a much higher yield than a two-year note. When the gap, or “spread”, is narrow, it is referred to as a flat curve. In that situation, a 10-year note, for instance, may offer only a modestly higher yield than a 3-year note. WHAT IS A CURVE INVERSION? On rare occasions, some or all of the yield curve ceases to be upward sloping. This occurs when shorter-dated yields are higher than longer-dated ones and is called an inversion. While various economic or market commentators may focus on different parts of the yield curve, any inversion of the yield curve tells the same story: An expectation of weaker growth in the future. [Recession]
• Stocks losses deepen as a key recession warning surfaces
  The Dow plunged more than 800 points as investors feared a recession following poor economic data from Germany and China. (Reuters) By Damian Paletta , Thomas Heath and Taylor Telford August 14 at 6:36 PM Recession signals intensified Wednesday in the United States and in some of the world’s leading economies, as the damage from acrimonious trade wars is becoming increasingly apparent on multiple continents. The U.S. stock market tumbled to its worst day of the year on Wednesday, after a reliable predictor of looming recessions flashed for the first time since the run-up to the 2008 financial crisis. The Dow Jones industrial average fell 800 points, or about 3 percent, and has lost close to 7 percent over the past three weeks. Two of the world’s largest economies, Germany and the United Kingdom, appear to be contracting even as the latter forges ahead with plans to leave the European Union. Growth also has slowed in China, which is in a bitter trade feud with the United States. Meanwhile, Argentina’s stock market fell nearly 50 percent earlier this week after its incumbent president was defeated by a left-wing opponent. [Recession]
• S. Korea to overtake Japan individual purchasing power by 2023, IMF predicts
  Posted on : Aug.12,2019 17:16 KST Modified on : Aug.12,2019 17:16 KST According to data gathered by the International Monetary Fund (IMF), South Koreans’ purchasing power per capita is expected to overtake Japan by 2023. According to the IMF World Economic Outlook database, South Korea’s purchasing power parity (PPP) is expected to rise to $41,362 by 2023, which would move it up in global rankings to 30th out of 193 countries. Japan per capita GDP, however, is still expected to be greater than South Korea’s. [PPP]

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JULY 2019

• N.Korea Racks up Highest Trade Deficit in a Decade
  By Cho Yi-jun July 15, 2019 12:39 North Korea racked up a trade deficit of US$2 billion last year due to economic sanctions, the highest figure in 10 years, according to the Voice of America on Saturday. According to data from the International Trade Center, North Korea imported $2.31 billion worth of goods but exported only $294 million, resulting in a deficit of $2.02 billion. From January to May this year, North Korea's trade deficit with China alone stood at $840 million, so the total is expected to be similar this year. International sanctions are the main reason for the mounting deficit. In 2016, North Korea's trade deficit was $232 million, but it soared to $1.48 billion in 2017 when sanctions kicked in following the North's nuclear and missile tests. Although it recorded trade deficit of around $1.5 billion in 2009 and 2010, it had been on the right track since, limiting it to under $1 billion. VOA quoted William Brown of Georgetown University as saying North Korea was able to make up the trade deficit with money remitted by overseas laborers. But now that route is closed, North Korea could deplete its foreign reserves in a few years. U.S. Assistant Secretary of State Affairs David Stilwell told Japan's NHK on Saturday that the U.S. has no plans to ease the sanctions until there is sufficient grounds to believe that North Korea is serious about keeping its promise to denuclearize. [Trade balance] [Statistics] [Sanctions evasion]

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JUNE 2019

• Korea Business News June 2019
  Op-Ed Roger Barrett - Managing Director
  The myriad of noteworthy events seems to be increasing almost daily during the G20 this week in Osaka. With Trump meeting Moon in Seoul on Tuesday, and following Xi’s quickly arranged State visit to Pyongyang last Thursday and Friday, escalating trade-tensions depressing many stock-markets globally, and the potential real war between Iran and the USA; it feels like "anything can happen in the next half-hour,” as a sixties adventure show once put it. The State Visit of Chinese Leader Xi Jinping to Pyongyang to meet Korean Leader Kim Jong Un last week was extremely significant in several different ways. [Xi_NK_Visit1906] [Business]
• Korean Exports Shrink Further
  By Choi Kyu-min June 12, 2019 11:57 Korea's exports have shrunk further amid an escalating trade war between China and the U.S. The Korea Customs Service on Tuesday said exports in the first 10 days of this month amounted to US$10.3 billion, down an alarming 16.6 percent from a year ago. Exports have fallen for six months running since December last year. Exports of semiconductors plunged 30.8 percent on-year and of petroleum products 20.1 percent. Cars and mobile communication equipment were down 0.7 percent and 5.9 percent. All exports to major trading partners shrank -- 26.7 percent to China, 7.6 percent to the U.S., 17 percent to the EU, 20.3 percent to Japan and 17.6 percent to the Middle East. "Korea relies heavily on exports of certain goods like semiconductors to certain countries, making it vulnerable to risks like the ongoing trade war between China and the U.S.," said Kim Gwang-suk at the Institute for Korean Economy and Industry. "Korea is now paying the price for failing to diversify its export portfolio while relying on the global semiconductor boom over the past few years." [China confrontation] [Trade war] [Collateral]
• N.Korean Pigs with Swine Fever Sold to Sausage Factories
  By Yoon Hyung-jun June 05, 2019 10:56 North Korean state farms are selling pigs infected with African swine fever virus cheaply to sausage factories, Radio Free Asia reported Tuesday quoting sources. Ham and sausage prices plunged from 6,000 North Korean won to less than 4,000 won in local markets because state farms are selling infected pigs at giveaway prices to sausage makers that export them for hard currency, a source in South Pyongan Province told RFA. A quarantine worker disinfects areas in Paju, Gyeonggi Province on Monday against African swine fever. /Yonhap Vendors claim that healthy people cannot be infected because the products are processed at more than 100 degrees Celsius, another source said. They also attach forged quarantine certificates. North Korea has still not responded to South Korea's May 31 offer of help in fighting the disease, a senior Unification Ministry official here told reporters. [Marketisation]

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MAY 2019

• Competition or Cooperation: China and South Korea in North Korea’s Special Economic Zones
  Date & Time: Tue, 06/11/2019 - 12:00pm - 1:30pm Location: Korea Economic Institute of America 1800 K Street, NW, Suite 300 Washington, DC 20006 Featuring: Théo Clément Research Associate King’s College London While North Korea has developed Special Economic Zones (SEZs) for several decades, most have attracted limited attention from foreign investors for a variety of reasons. The more successful of these areas have drawn interest from Chinese and South Korean partners, but interactions with each country follow very different models. Whereas Chinese economic cooperation in North Korean SEZs is led by small-scale trade, South Korean engagement has entailed large investments. Should a denuclearization process start, however, Seoul’s emphasis on these zones for renewed engagement with Pyongyang will likely prompt Beijing to be more committed to growing its presence in North Korean SEZs. Please join KEI for a presentation by Dr. Théo Clément on the evolution of North Korean SEZs, the potential for competition between China and South Korea in developing these areas after sanctions are lifted, and why cooperation would be necessary for both to achieve their goals in North Korea.[SEZ]
• N.Korea 'Stealing Kaesong Equipment to Make Clothes'
  By Cho Yi-jun, Yoon Hyung-jun May 24, 2019 13:16 North Korea is secretly using the equipment of South Korean manufacturers from the shuttered Kaesong Industrial Complex to make clothes, Radio Free Asia on Wednesday quoted sources as saying. Some of the South Korean manufacturers are poised to go to the North Korean border town and check on their equipment in the joint industrial park, which was closed down in 2016. But apparently North Korean factories as far afield as Tonglim in North Pyongan Province have stolen equipment and are making clothing with it for export. [Kaesong]
• N.Korean Boasts of Thriving Economy Despite Sanctions
  By O Youn-hee, Kim Myong-song May 22, 2019 09:40 North Korean state media on Tuesday claimed that department stores are overflowing with goods that meet customer demand, quoting foreign media and visiting tourists. In an article titled "[North Korea] that is displaying its socialist might based on rapid economic development," the official Rodong Sinmun wrote, "You shouldn't lend your ear to fake propaganda campaigns by Western countries, but look squarely at [North] Korea that is doing what it should do in defiance of sanctions." North Korea's "economy grows constantly despite sanctions," it added. The daily denied economic difficulties even as the regime is begging the international community for food aid. The article represented a startling volte-face from recent complaints of "severe hardship" and calls for self-reliance. North Koreans look at home appliances in a department store in Pyongyang on April 14, in this photo from North Korean propaganda website Uriminzokkiri. Meanwhile, the U.S. State Department pointed out that the humanitarian situation in the North is the result of the regime's own failings. "The United States is deeply concerned about the well-being of the North Korean people," a State Department spokesperson said Monday. "The humanitarian situation in North Korea, which is the result of the [North Korean] regime choice to prioritize its unlawful [weapons of mass destruction] and ballistic missile programs over the welfare of its own people." "We are aware of reports of food shortages" in the North, the spokesperson said but added that international sanctions "do not prohibit purchases of food imports" by the North. A day later, the North's Ambassador to the UN Kim Song held a press conference at UN headquarters to protest against the U.S.' seizure of the North Korean cargo vessel Wise Honest and sanctions against the North. "The United States should deliberate and think over the consequences its outrageous acts might have on the future developments," Kim said. On May 17, Kim sent a letter to UN Secretary General António Guterres to protest against Washington's seizure of the cargo ship, calling it "an unlawful and outrageous act." [Sanctions] [Defiance]
• Logistics center likely to open near Kaesong Industrial Complex by next year
  Posted on : May.22,2019 16:56 KST Modified on : May.22,2019 16:56 KST Center would resolve complex’s transportation issues The Kaesong Industrial Complex A comprehensive logistics center is likely to open by the end of next year near the inter-Korean border, within easy reach of the Kaesong Industrial Complex. The complex will serve as a logistics base for tenant companies at the complex. On May 21, the Gyeonggi Kaesong Industrial Complex Business Cooperative announced that it would apply for a permit from Gyeonggi Province around June 20 to build a logistics center, which is supposed to solve transportation issues that have plagued the Kaesong Complex. [Kaesong] [Logistics] [Wishful thinking] [US dominance]
• S.Korean Firms Keep Exporting Banned Arms-Making Goods
  May 17, 2019 12:48 South Korean firms continue to export banned materials that can be used to make weapons of mass destruction, according to government data. This sends alarm bells ringing because they could be shipped to North Korea or Iran through intermediary countries. According to data from the Ministry of Trade, Industry and Energy, South Korean firms were caught on 156 occasions exporting so-called strategic materials illegally since 2015, with discovered cases rising from 14 in 2015 to 41 last year. In the first three months of this year alone, whopping 31 illegal shipments were intercepted, though the figures do not show whether this is due to greater vigilance or an increase in attempts. [Tribute] [Sanctions] [US dominance][Exports] [Dual use]
• Stock Market Plummets Over U.S.-China Trade War
  By Lee Kyung-eun, Kim Tae-geun May 10, 2019 13:17 Stock markets plunged in recent days amid dire economic indicators and jitters over a U.S.-China trade war. The won closed at W1,179.80 against the U.S. dollar on Thursday, down W10.40 from the previous day and the lowest in two years and four months. The benchmark Korea Composite Stock Price Index nosedived 3.04 percent, or 66 points, closing at 2,102.01 points, the lowest since Jan. 15. An electronic board shows the Korea Composite Stock Price Index and the won-dollar exchange rate at Thursday's close at KEB Hana Bank headquarters in Seoul. /Yonhap Samsung Electronics shares fell four percent to W42,450. Other market leaders such as SK Hynix, Hyundai Motor and LG Chem also took a dive by 5.35 percent, 3.32 percent, and 3.65 percent. The junior Kosdaq index also fell 2.84 percent to 724.22 points. © This is copyrighted material owned by Digital Chosun Inc. No part of it may be reproduced or transmitted in any form or by any means without prior written permission. [China Confrontation] [Trade war] [Consequences] [Tribute]
• N.Korea Scraping the Barrel to Earn Hard Currency
  By Lee Ha-won, Yoon Hyung-jun May 07, 2019 13:55 North Korea is reduced to selling hair like the Victorian poor to earn hard currency as international sanctions ban more lucrative exports. Japan's Asahi Shimbun on Monday reported that North Korean wigs and false eyelashes are being advertised in the Chinese border city of Dandong, and a former North Korean electronic parts factory with excess staff of several thousands of workers is now making them instead. Last autumn, company managers asked a broker for an introduction to Chinese companies that might place orders for such products, according to the Japanese daily. Unlike minerals, seafood and vegetables, exports of handicrafts are not banned by UN sanctions. The North exported an estimated US$2.4 million worth of wigs and other hair products to China in February, about double the amount of the same month in 2018 and taking up more than 10 percent of the North's total exports to China of about $17.96 million. The regime has also opened dance and music classes in China as another way to earn hard currency. In March, a group of North Korean residents in Shenyang advertised lessons by North Korean artists for a fee of about 50 yuan (about W9,000) per hour. [China NK] [Trade] [Sanctions effect]
• More Koreans Feel Pinch After 2 Years of Moon Gov't
  By Kim Ji-seop May 02, 2019 10:09 Koreans are finding it increasingly difficult to make ends meet after several of the Moon Jae-in administration's "income-led" growth policies backfired. The Korea Economic Research Institute polled 1,000 adults for the Chosun Ilbo across the country last week, and 58.9 percent said it has become even more difficult to make ends meet since Moon came to power, up from 28.8 percent a year ago. The proportion who said they are afraid their finances will become even tighter rose from 25.4 to 48.8 percent over the same period, including 31.9 percent who fear it will get worse "to an extreme degree," compared to a mere eight percent last year. In contrast, those who felt conditions will improve dwindled from 33 to 25.5 percent. Some 61.5 percent said the job market has grown worse since Moon became president, up from 51.6 last year. Unemployment remains high now the minimum wage has increased in the double digits. The survey also showed that the income gap widened to a new record. The proportion whose income rose grew from 20.9 to 34 percent, with 21 percent saying it rose more than 10 percent, compared to 8.2 percent a year ago. But at the same time some 45.8 percent said their income has shrunk, up from only 26.2 percent, and those who said it shrank more than 10 percent soared from 17.8 to 31.1 percent. Shin Se-don at Sookmyung Women’s University said, "The fact that more than half of Koreans feel that it has become tougher to make ends meet is evidence that the Moon administration's policy of income-led growth has had an adverse impact. Excessive minimum-wage hikes, shortened work hours and various pension and tax burdens are hurting the economy." [Economy] [Anti-Moon] [Conservatives]
• N.Korea Pushes Greater Rice Farming Efforts
  By Yoon Hyung-jun April 30, 2019 13:03 North Korea's state media are reduced to stressing the importance of rice farming as international sanctions strangle off the supply of hard currency and the food crisis worsens. The official Rodong Sinmun in an editorial titled "Let's uphold the party with rice" on Monday said, "The victorious sound of roaring guns that will mercilessly frustrate hostile forces' maneuver to choke us off with sanctions will come first from the agricultural front." "Rice is more precious than gold," it added. North Korean officials welcome leader Kim Jong-un (right) upon his return from Russia on Sunday in this grab from [North] Korean Central Television. The daily encouraged people ahead of the planting season as the propaganda machine has reverted to promoting nation founder Kim Il-sung's "juche" or self-reliance doctrine. "We should have a lot of rice to hold the banner of the state-first policy higher and to uphold our socialist system more strenuously," the daily said. Meanwhile, [North] Korean Central Television aired a 50-minute clip of leader Kim Jong-un's three-day visit to Russia on Sunday afternoon, where he wore a fetching fedora and a black overcoat just like Kim Il-sung did. [Agriculture] [Rice]

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APRIL 2019

• ILO insists that S. Korea guarantees freedom of association for unemployed and dismissed workers
  Posted on : Apr.21,2019 16:40 KST Modified on : Apr.21,2019 16:40 KST Organization determines amendments in labor-related laws are inadequate The Korean Confederation of Trade Unions (KCTU) holds a press conference demanding South Korea’s adoption of International Labour Organization (ILO) conventions on Apr. 16 in Seoul. (Yonhap News) The International Labour Organization (ILO) reiterated its insistence that the South Korean government adopt legal measures to guarantee freedom of association for unemployed and dismissed workers. It also stated the opinion that excessively specific legal stipulations regarding matters such as conditions on labor union officials entering workplaces could be regarded as constituting excessive interference. [Labour] [Human rights]
• Successes Made in Tideland Reclamation
  Date: 19/04/2019 | Source: DPRK Today (English) Pyongyang, April 18 (KCNA) -- Successes have been made in the tideland reclamation in the Democratic People's Republic of Korea. In the first quarter of the year alone, thousands of hectares of new land were reclaimed. The South Hwanghae Provincial Tideland Reclamation General Enterprise built more than 15 000 meter-long dike in March to complete the first dam construction in the third and fourth districts of the Ryongmaedo Tideland, thus acquiring over 3 600 hectares of new land. The South Phyongan Provincial Tideland Reclamation General Enterprise set the position of the closure embankment in a rational way and introduced diverse construction methods into the Ansok Tideland reclamation. Now, it acquired over 1 400 hectares of arable land and made a breakthrough in hastening the tideland reclamation. Meanwhile, the North Phyongan Provincial Tideland Reclamation General Enterprise, which obtained a thousand and several hundred hectares of new land by completing the first dam construction in the first district of the second-phase project for reclaiming the Honggondo Tideland last year, has successfully blown up 50 000, 150 000 and 250 000 cubic meters of earth. [Land reclamation]
• Kim Jong-un 'Satisfied' with Glitzy Mall in Pyongyang
  By Kim Myong-song April 09, 2019 12:13 North Korean leader Kim Jong-un has expressed "great satisfaction" at a newly refurbished mall in Pyongyang which will open imminently despite crippling international sanctions. Kim visited the Daesong mall after it was given a major facelift, the official [North] Korean Central News Agency reported on Monday. It was his third on-site inspection in a month after massive construction sites in Samjiyon, Ryanggang Province and the Wonsan-Kalma coastal tourist zone in Kangwon Province. The trips come amid desperate efforts to stimulate the North's moribund economy ahead of the new session of the rubber-stamp Supreme People's Assembly starting Thursday. North Korean leader Kim Jong-un (center) looks at a product at a mall in Pyongyang in this grab from the [North] Korean Central News Agency on Monday. Last summer, Kim harangued factory workers in several provinces for laziness and incompetence, but this time he only offered encouragement and expressed satisfaction in an apparent bid to conceal how dire the North's economic reality is. But a source said the North is having great difficulties mining coal and faces a chronic power shortage because international sanctions prevent it from importing equipment and materials needed to operate the mines. The regime is trying to attract tourists from China to solve its increasing shortage of hard currency. The notorious mass games are scheduled again for April 15, regime founder Kim Il-sung's birthday, Radio Free Asia reported on Monday. The calisthenics performance typically draws substantial numbers of tourists from China who do not object to tens of thousands hopping about and waving colored banners in queasy unison. [Sanctions] [Growth] [Chagrin] [Inspections]
• N.Korea Delays Mega Project as Sanctions Bite
  By Kim Myong-song April 08, 2019 12:48 North Korea has delayed massive construction project in the Wonsan-Kalma coastal tourist zone as international sanctions turn off the spigot. According to the official [North] Korean Central News Agency on Saturday, leader Kim Jong-un visited the coastal tourist zone for the first time in six months and pushed back the deadline so the project can be completed by nation founder Kim Il-sung's birthday in April 2020. His pet project was scheduled to be completed by Oct. 10 this year, which is the founding day of the Workers Party. But lachrymose earlier reports in the state media said workers have to use their "bare hands" because of the shortage of equipment and fuel caused by international sanctions. [Construction] [Sanctions] [Tourism]
• Kim Jong-un Visits Massive Construction Projects Again
  April 05, 2019 13:32 North Korean leader Kim Jong-un has again visited Samjiyon, Ryanggang Province where massive construction projects are underway, the North's official Korean Central Television reported Thursday. The projects have reportedly been pushed forward despite international sanctions to the point where workers are using their bare hands. North Korean leader Kim Jong-un (center) gives instructions to officials at a construction site in Samjiyon, Ryanggang Province, in this grab from the [North] Korean Central Television on Thursday. Kim has often visited Samjiyon, his father Kim Jong-il's alleged birthplace near Mt. Baekdu, right before he made an important decision like the execution of his uncle Jang Song-taek and his declaration that the country's nuclear program is complete. [Infrastructure] [Construction]

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MARCH 2019

• Moon advocates S. Korea-Malaysia economic cooperation in global halal industry
  Posted on : Mar.13,2019 17:26 KST Modified on : Mar.13,2019 17:26 KST During a state visit to Malaysia, South Korean President Moon Jae-in said that if South Korea and Malaysia cooperate, they can conquer the global halal industry. After attending the K-Wave and Halal Show in Malaysia event in Kuala Lumpur’s 1 Utama Shopping Centre on Mar. 12, Moon said, “I’ve confirmed the infinite potential behind the economic cooperation of South Korea and Malaysia,” adding that the two countries’ cooperation in the halal industry could formulate a new model of “win-win” cooperation. [SK Malaysia] [Halal]
• Study tour to North Korea (19 – 28 May 2019)
  The last summit in Hanoi between North Korean leader Kim Jong-un and US president Trump did not result in any agreement, and there are now reports about the reconstruction of parts of the Sohae satellite launch facility, which was partly partially dismantled. How do the North Koreans view the current international situation and the recent developments? What is the impact of the UN Security Council sanctions on North Korea’s economy? What economic changes are visible to the visitor, and what are the business opportunities at the moment? Because of these developments, it is now a good time for analysts and academics with an interest in North Korea to explore the country in person. For this reason, we are organizing a study tour in May, which will have an introductory character and will cover a broad range of political, economic, security and societal issues. Examples of topics: • security: the view from the North. Meetings with the Ministry of Foreign Affairs (Disarmament and Peace institute), Institute of International affairs, the Korean People’s Army, local peace organization, a visit to the DMZ (DeMilitarized Zone) • economic transformations: incorporating competitive market mechanisms into state-owned enterprises. Understanding the Corporate Responsibility Management System through lectures from the State Academy of Sciences and discussions with managers of factories • impression of a large new economic development project: a tour around the huge Wonsan-Kalma tourist area (this beach resort is part of the Wonsan-Mount Kumgang International Tourist Zone, and has not yet been visited by foreigners; see picture) • a taste of international trade: attending the busy Pyongyang International Trade Fair (the spring PITF takes place from 20 - 24 May) • being among Koreans, by visits to a funpark, a dolphinarium, a supermarket, the Heineken pub, etc [Business]
• Kim Jong-un Vows to Improve Living Conditions
  By Kim Myong-song March 11, 2019 12:05 North Korean leader Kim Jong-un vowed to improve the economy and living conditions in his impoverished country, the official [North] Korean Central News Agency reported Saturday. At a Workers Party rally that brought together the lowest echelons of propaganda officials across the country, Kim expressed hope that North Koreans will become affluent enough to "eat white rice and meat soup," a common formula in such pledges from North Korean leaders. [Living standards]
• N.Koreans Work with Bare Hands in Major Construction Sites
  By Kim Myong-song March 07, 2019 12:50 North Korean workers are building roads and other facilities with their bare hands in Samjiyon, Ryanggang Province where massive projects are underway. North Korean leader Kim Jong-un is driving development of the region, where Mt. Baekdu stands, as a tourist attraction but international sanctions have resulted in a severe shortage of equipment, materials and fuel. In a rare admission of hardship, state media said huge numbers of soldiers who have been mobilized for the projects are suffering in freezing weather. "Soldiers who have been mobilized for the Samjiyon construction project are digging through the frozen earth using hammers and picks and transporting soil by hand inside sacks," the official Rodong Sinmun daily said Tuesday. "Their clothes are stiff as armor and they are having a hard time controlling their frozen hands and feet after working in bone-chilling water, but they overcame [these difficulties] through their [ideological] convictions." One source in Ryanggang Province said, "Construction workers are forced to live in freezing shacks and go hungry because of the poor quality of the food." The North even promised prized membership in the Workers Party to people who volunteer to take part, but there have been no takers, so instead they are being press-ganged. "Kim Jong-un is pushing ahead simultaneously with the construction of tourism zones in Samjiyon and Wonsan-Kalma coastal area, resulting in shortages of workers, money and materials," another source said. Meanwhile, the Rodong Sinmun devoted four of its six pages to Kim's return from Vietnam in an effort to make his failed summit with U.S. President Donald Trump look like a success. [Construction] [Military economy] [Sanctions effect]
• 'Unification can be curse'
  Posted : 2019-03-06 14:25 Updated : 2019-03-07 16:15 Kim Byong-joon, former interim leader of the main opposition Liberty Korea Party, speaks during an interview with The Korea Times Monday. Korea Times photo by Shim Hyun-chul By Oh Young-jin Unification could spell a curse for South Korea because the current progressive government, lacking clear vision and hobbled by its ties with big labor, has failed to prepare for it, said Kim Byong-joon, who just finished a seven-month tour as interim leader of the main opposition conservative Liberty Korea Party (LKP). "There would be a big sucking sound that knocks the wind out of our manufacturing base," said the 65-year-old former top policy aide to the late progressive President Roh Moo-hyun during a recent interview. Kim worked together with President Moon Jae-in, then Roh's chief of staff. Now, the two find themselves on the opposite ends of the political spectrum _ after Kim took the job of fixing the Liberty party that was reeling amid a resounding defeat in the June local elections following the impeachment of Park Geun-hye. "Neither is a bonanza," Kim said, dismissing Park's famous phrase to push for her reciprocal "trustpolitik"policy with the North that faltered almost immediately after it started. He noted that the North's quality and cheap labor would pull the southern firms like a magnet, leaving the South industrially hollow. "The current administration is supposed to prepare for a transformation to more efficient, higher-value industries," Kim said. "The government appears not to even have a clue about it. If it does, it has just sat on its hands, fearing it may irk the unions." [Unification] [Economy]

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FEBRUARY 2019

• Productive Pyongyang
  Choson Exchange report or urbanisation [Urbanisation] [Economic growth]
• Korean Exports Fetch Ever-Dwindling Prices
  By Jeon Soo-yong February 12, 2019 11:21 Prices of Korean exports declined by the biggest margin among major exporters over the last 13 years. The main reason is the vulnerability of Korea's main exports like semiconductors, petrochemical products, steel and cars to oil price fluctuations and other external factors. According to the World Trade Organization on Sunday, Koreas export price index stood at 73.6 in November of last year if prices in January 2005 are set at 100. The WTO compared shipments from nine major regions including the U.S., the EU and Japan that account for 85 percent of global manufactured goods exports. Export prices also fell from Japan (86), Singapore (90.3) and Taiwan (90.3). But the U.S.' export price index rose to 117.3, Canada's to 117.6, the EU's to 115 and Switzerland's to a whopping 164.2, though its volume is much smaller. © This is copyrighted material owned by Digital Chosun Inc. No part of it may be reproduced or transmitted in any form or by any means without prior written permission. [Terms of Trade]

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JANUARY 2019

• CPTPP: New Key Player in International Trade
  By Pradumna B. Rana and Xianbai Ji Pradumna B. Rana (prana@ntu.edu.sg) is associate professor and coordinator of the International Political Economy Programme in the Centre for Multilateralism Studies (CMS) at the S. Rajaratnam School of International Studies (RSIS), Nanyang Technological University (NTU), Singapore. Xianbai Ji (XJI005@e.ntu.edu.sg) is a PhD candidate at RSIS. This article was originally published in RSIS Commentary and can be found here. After prolonged negotiations, the 11-nation Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) became effective on 30 December 2018 when Australia, Canada, Japan, Mexico, New Zealand, and Singapore implemented the first round of tariff cuts. Vietnam implemented the cuts on 14 January 2019 and the other four members are expected to follow suit. The CPTTP members account for approximately 14% of the global economy. The CPTPP’s entry into force is a move in the right direction given today’s unpredictable trade policy environment. The accord sustains and pushes forward the momentum of the trade liberalization process when multilateralism under the World Trade Organization (WTO) has stalled, sets regionally acceptable cutting-edge rules on many 21st century trade issues related to production networks and supply chains, and gives rise to a vibrant market of 500 million aspiring consumers across Asia, the Americas and the Pacific. [CPTPP] [TPP] [FTA]
• Kim Jong-un Showers Senior Officials with S.Korean Cosmetics
  By Kim Myong-song January 23, 2019 10:55 North Korean leader Kim Jong-un has given the families of senior Workers Party officials New Year's gifts of South Korean cosmetics, according to a source on Tuesday. The source said staff from the Workers Party's Finance and Accounting Department bought 1,000 South Korean cosmetics sets with dollars in the Chinese region of Yanbian in mid-November. They were given to the families of senior officials in the party's Central Committee on New Year's Day. Many of them then sold them in the markets. The regime regularly showers senior officials with gifts to buy their loyalty. Gifts normally included liquor and meat, as well as Swiss watches, home electronics and cars in special cases. But South Korean goods are normally avoided. "There seems to be a craze for South Korean cosmetics in Pyongyang," the source added, "and the regime is easing controls on South Korean goods to some extent amid the current détente." South Korean cosmetics are two to three times more expensive than Chinese or North Korean products but are in high demand in the markets. "South Korean cosmetics are one of the most popular wedding gifts a groom can give his bride in Pyongyang," said a defector who used to live in the city. [Inter-Korean trade] [Cosmetics]
• Cellphone exports fall to 16-year low
  Posted : 2019-01-20 16:55 Updated : 2019-01-20 17:35 By Baek Byung-yeul Korea's exports of mobile phones hit a 16-year low in 2018 after falling 23.2 percent year-on-year amid mounting competition from Chinese phone makers, data showed Sunday. Cellphones have been a major export item along with semiconductors. But the business has suffered a continued decline because of the slow global smartphone market and increased offshore production of cellphones and their components, industry officials said. According to the data from the Ministry of Science and ICT and the Institute of Information & Communications Technology Planning & Evaluation (IITP), cellphones and components worth $14.61 billion were shipped overseas in 2018, a 23.2 percent fall from the previous year's $19.03 billion. The figure was the lowest in 16 years since $11.36 billion in 2002. It also marked the third straight year of declines since $30.03 billion in 2015. The weak performance of cellphone exports also comes from fewer locally produced smartphones and components, with more than 90 percent of smartphones from Korean phone makers produced overseas. As of the first quarter of 2018, only 9 percent of Korean phone makers' smartphones were produced in Korea, according to Strategy Analytics data. The cellphone components business fell 29.7 percent year-on-year because Samsung Electronics ? the world's largest phone maker with a market share of about 22 percent in 2018 ? is increasingly moving its smartphone factories overseas to emerging countries such as Vietnam and India. Korean smartphones also have been threatened by fast-growing Chinese firms such as Huawei, Oppo and Vivo, which have narrowed the technological gap with Korean products. [China competition] [Offshoring]
• Tideland Developed Briskly
  Date: 11/01/2019 | Source: Rodong Sinmun (En) | Read original version at source Share Button Tweet In hearty response to the New Year Address of Supreme Leader Kim Jong Un the managerial staff and developers of the North Phyongan Provincial General Tideland Reclamation Enterprise enthusiastically develop the tideland round the Honggon Island for the second stage from the beginning of 2019. They blew up mountains in the Sinmi Island and the Taesamgot Island respectively on January 6 despite the rigors of winter and produced 50,000 tons of earth and rock. They then proceed to shore up Bank 1 and build Bank 2 for the first stage. Thanks to their indomitable fortitude and untiring devotion, success after success is won in developing the tideland round the Honggon Island for the second stage. Song Chang Yun [Reclamation]
• N.Korea's Exports Plunge Amid Sanctions
  By Yoon Hyung-jun January 07, 2019 10:48 North Korea's exports plummeted last year to just 1/10 of 2016's due to intensifying international sanctions, Voice of America reported Saturday. There are even forecasts that its foreign currency reserves could run out completely. According to data from the International Trade Center and other sources, North Korea exported US$235.3 million worth of products to its 14 major trading partners including India, Mexico, Singapore, Thailand and Turkey in 2016, but that shrank to only $14.5 million as of the third quarter of last year. Even if fourth-quarter figures are added, North Korea's exports in 2018 would not exceed 10 percent of 2016's. According to Chinese customs data, North Korea's exports to China last year dropped to only eight percent of the volume in 2016. Meanwhile, Radio Free Asia reported that torrential rains in North Korea's North Hwanghae Province in August last year left 42 people dead and 242,000 homeless. According to the International Federation of Red Cross and Red Crescent Societies, torrential downpours of up to 678 mm per hour resulted in landslides causing huge levels of damage. Daniel Wallinder at the IFRC said, "The floods are part of a general and worrying trend in the past years of extreme and highly volatile weather that need further improvements in early warning systems and greater community training. Although geographically dispersed, the damage to land and to infrastructure often happens in areas that we could predict would be high-risk." [Sanctions] [Exports] [Flooding]
• Moon expands communication with chaebol
  Posted : 2019-01-06 17:12 Updated : 2019-01-07 13:18 President Moon Jae-in listens to an explanation about a smartphone-linked scuba diving product produced by a Korean startup during a visit to the N15 industrial lab in Seoul, last week. Yonhap By Kim Yoo-chul Approval ratings of President Moon Jae-in remained relatively high in the first week of this year on the back of public approval for his signature "engagement-focused" North Korea policy. But his lackluster and not-that-impressive domestic policy, particularly the apparent failure of its economic policies after its decision to hike the minimum wage and cut the workweek hours has taken its toll. Moon's approval rating lowered to 47.1 percent in mid-December, the lowest since he took power in May 2017, according to local pollsters. While his approval rating saw a slight rebound, political analysts said a further upturn is dependent upon the President's wider rapprochement toward economic issues. [Moon Jae-in] [Chaebol]
• N.Korea Eyes Valuta with Tours to Celebrate New Year
  By Yoon Hyung-jun December 31, 2018 12:38 North Korea is offering a package tour that gives visitors a chance to greet the New Year in Kim Il-sung Square in Pyongyang, one of the most desolate concrete expanses in the world. The tour is being organized by a state-run travel agency and not by a foreign tour operator and seems aimed at generating much-needed valuta amid international sanctions. North Korea's National Tourism Administration unveiled the tour on its website, available from Dec. 29 to Jan. 5. Visitors will be given the "rare opportunity" to watch a midnight performance in Kim Il-sung Square and an ice sculpture exhibition in the capital. North Korea is apparently resorting to a network of associates in third countries to bypass sanctions. The Wall Street Journal reported that North Korea has "built an alternative financial system using a shadowy network of traders" for years. For instance, a timber company in Africa called Chilbo, which employs many North Korean workers, exported US$100,000 worth of lumber to a Chinese company, but the payment went through a middleman in Singapore. The daily said North Korea has surreptitiously bought and sold oil, coal and cigarettes despite international efforts to stem such activities. [Tourism] [Sanctions]

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