GoodFriends: Research Institute For North Korean Society

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North Korea Today No. 413, July 27, 2011

[“Good Friends” aims to help the North Korean people from a humanistic point of view and publishes “North Korea Today” describing the way the North Korean people live as accurately as possible. We at Good Friends also hope to be a bridge between the North Korean people and the world.]
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[Editor’s Note] Minister of Foreign Trade Ri Ryong-nam: The next Park Nam-gi?
Ministry of Foreign Trade Sitting in the Eye of a Storm - Bone-Chilling Inquisition Looming
Beleaguered Overseas Representative Offices Sigh
Overseas Representatives in China Burdened by Officials’ Visits from North Korea
Family and Relatives of Park Nam-gi Mostly Deceased
Housing Assignment to Single Women above 35
[Special Series] Conditions for the Strong and Prosperous Nation, 2012 (3)
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[Editor’s Note] Minister of Foreign Trade Ri Ryong-nam: The next Park Nam-gi?
The ministry of foreign trade is under inspection. All attention within the ministry is directed to the question of who the next target of the inspection would be. A popular rumor has it that in the end it will be Minister of Foreign Trade, Ri Ryong-nam. Although if it happens, the punishment will be accounted to his alleged lack of dedication about resolving the food shortage problem, the dominant view is that it'd be the case of Ri being a scapegoat in the effort for the generation transition to implement a smooth succession. That the story of ex-director of the Planning and Finance Department Park Nam-gi is brought up again is also because of this prediction that Ri would be a scapegoat. Thus it only makes sense that people who work for Ri are terrified. When the head goes, his team would also follow that footstep. There already are rumors about the next target, which is the reason why the general atmosphere at Ministry of Foreign Trade is tense. With this prelude to a massacre foretold, the efforts to survive are inevitably desperate. The Central Party has assigned the Ministry of Foreign Trade the food assignments ‘beyond their capability’. The persecution for Ministry of Trade employees is hence about to start.


Ministry of Foreign Trade Sitting in the Eye of a Storm - Bone-Chilling Inquisition Looming
In the Ministry of Foreign Trade (MoFT) located in the center of Pyongyang, one can feel highly-charged anxiety: a damaging, if not fatal reshuffling is expected following an investigation in various areas in the Ministry. “When the investigation starts, some of the officials will be inevitably banished from the Ministry,” one official from the ministry commented. Public Prosecutor’s Office and the National Defense Committee are jointly investigating Customs offices and trading companies including overseas representative offices of the MoFT. The official reason for the investigation is to crack down any government officials’ activities in espionage or bribery. The central government believes that, while officials are sent abroad to fulfill their duties for the country, they are in fact busy taking care of their personal interests.

Even though it is not spoken, the officials from the ministry must feel like walking on thin ice these days. They do not know who will be a scapegoat of this politically-driven exercise. Fear is mounting among the officials with the speculation that whoever is to be accused will face the same punishment as the former director of the Ministry of Planning and Finance Park Nam-gi and the former deputy director of the National Security Agency Ryu Kyong. “Overseas offices are blamed for not having been able to complete the military provision assignment. In the beginning, they tried to resolve the problems at the level where the outcome would please the higher officials. Eventually, the officials started complaining openly that they could not do it anymore. Due to severe complaints, the assignment was waived, but now the central government is taking the MoFT to be accountable for the military provision shortage and there are several names mentioned for the accusation,” mentioned one central government official. He also said that Ri Ryong-nam, the minister of the MoFT, seems to be the ultimate target for this investigation. Ri started his career in the ministry as an assistant to the minister, became a deputy minister in April 2011, and assumed the role of the minister in 2008.

The reason for the speculation about Ri is that he failed to accomplish the mission on army provision, and there’s a purely political reason as well. In the process of a power shift from the father to the son, the minister is one of the old guards to go. Regarding the military’s food shortage, the central government has grown doubtful about the minister’s loyalty to the authorities. MoFT’s used to outperform its duties on army provision—its overseas offices contributed twice as much of the required amount. However, since last January, the offices started complaining about this task and asked the central authorities to exempt the duty. The central authorities are questioning whether Ri has put enough efforts to calm his subordinates and suspecting that he actually encouraged the offices to rebel behind the scene.

The central authorities remain convinced that the MoFT did not do a good job in motivating its overseas offices for the army provision project. The central authorities believe this attitude clearly shows its lack of loyalty or commitment. With this reasoning, the central authorities blame the overseas offices for the food shortage in the military. They argue that if the offices had done their jobs dutifully, the situation would have been better. Such behavior in the overseas offices may set a bad example for loyalty to the new leadership. “The overseas offices only completed 60% of its assigned target on army provisions. This result can suggest that they do not take the assignment, and the new authorities, seriously. Heecheon Power Plant Project and Pyongyang Housing Project (building 100 thousands housing units for the residents of the city) have not made much progress due to a lack of funds. And it seems that the blame will also go to Ri,” commented an official. He also added that Mr. Ri’s frequent visits to China and his extraordinary effort to solve the food shortage problem all resulted from the fear that he may get banished otherwise.


Beleaguered Overseas Representative Offices Sigh
The mood of the trade offices is very tense. The first reason is that people were shocked that each office was ordered to send 5,000 tons of food to North Korea. The other reason is that they didn’t know how extensive the aftermath of the recent inspection of Department of Foreign Trade would be. This year, there was a massive replacement of high-ranked party, political, military officials with a younger generation. Therefore the department is expecting similar replacements. People feel that they should lay low in times like these. According to one Department of Trade official, “One wrong word could destroy a family for 3 generations. From the beginning of the audit they set out to prosecute people for even the slightest offense. People will get fired if the office doesn’t meet the food quota. Additionally, people will be harassed if the amount of money wired is less than expected. At times like these there’s no knowing who will be victimized so everyone keeps quiet despite being dissatisfied. But it’s not that they don’t have anything to say. Whenever political, party officials demand something from the comfort of the offices in North Korea we have to comply no matter how unreasonable. If we don’t give them what they want we are sent back to North Korea, so we have to spend part of the profits to give them what they want. If we fail to appease them we are subject to unreasonable tasks.” “The central party declared, ‘The reason for the investigation was that the trade offices were hurting the national finances by filling up their own pockets.’ Our country hasn’t done anything for us, we can’t even buy a bottle of liquor with our salaries. Things get out of hand when we have a large stream of visitors from North Korea like these days. It’s dumbfounding when we are accused of corruption and graft when the government hasn’t even given us salaries, let alone trade funds. I don’t know how we are accused of embezzling when we have been going through all kinds of trials and working ourselves to death to send food and construction funds to North Korea. Are we not even supposed to eat or drink?” asked a trade official despairingly.

Also, some overseas trade officials demur whether appropriating a little money for living expenses should be a crime. They claim that the officials who bring party funds overseas to purchase large quantities of goods and appropriate them are the ones to be investigated. An official lamented, “My second child has to go to college, but he cannot attend because we don’t have the money to pay the tuition.” “Being already depressed and anxious, trade officials are even more worried waiting to see who will be fired. Because there is talk of purging at a time when the party should encourage the loyalty of the officials, everyone is unstable and nervous. I don’t know what the central party hopes to gain by alienating the trade officials. The party’s current actions will only strengthen distrust of the trade officials who are likely to turn their backs on the party,” the official added.


Overseas Representatives in China Burdened by Officials’ Visits from North Korea
In addition to the assignment of obtaining 5,000 tons of food, overseas representatives in China have one more burden—dealing with North Korean officials visiting China to find Chinese investors. The majority of officials come visit China, without any specific business deals. It’s become too much work for the representatives to organize meetings with investors, as well as taking care of their accommodation and entertainment. Whether or not they accomplish business deals, the representatives are even required to prepare gifts for the officials to bring back to the homeland.

Overseas representatives commented, “The hospitality costs for visiting officials are more than the money that we send back to the government. They shouldn’t come here unless they have business deals.” A couple of months ago, the representatives pretended that they were out of office to avoid visiting officials, but now some are purposely ignoring them, saying “I don’t care. They are on their own.” One oversea representative, working in Shenyang, expressed his frustrations: “I deal with at least three to four groups per month. I spent 60,000-70,000 Yuan last month for their entertainments. Actually, this was less than the other times. It’s too hard for me financially to cover their hotel, meals, air tickets, train fares, and even gifts that they could bring back home. Officials who visit one month come again the next month. If it continues like this, I will be out homeless soon. I told the visiting officials last month that I will do it this time, but I can’t do it next time.”

Beside the expenditures, this creates a problem in relationships with Chinese businessmen. “I informed Chinese investors about the North Korean officials’ visit, and arranged meetings with them. But investors don’t like these invitations anymore, because they feel that they just spend money without any business deals accomplished. In the beginning, they treated the North Korean officials to dinner, but now they assert that they can’t do business with us unless there’s an actual business deal. After they spent money on North Korean officials, buying them gifts, entertaining them, and even giving them bribes with no gains, the investors complained what a nonsense it was. I was so embarrassed so many times. Some never come back to do business with us, and some don’t even pick up the phone or make up excuses saying they are too busy to meet with us. Now, I am pleading officials not to visit unless they have specific business deals. Every time they come, we have to come up with 1,000 Euro per person, which we work so hard to earn. They can’t waste our money like that. They probably have no idea how hard we work to earn that money,” vented one official at an oversea representatives office.

Another official, working in Dandong, also pointed out that it damages their actual workflow and business relationship with the Chinese. He stated, “I don’t want to pick up the phone anymore, because there are so many officials wanting to come just for tourism. Chinese investors that I’ve had relationship with don’t want to meet up with North Korean officials anymore. The entertainment cost is relatively high—200,000 Yuan—especially compared to the business deals they’ve gotten out of it. The relationships I’ve developed over years are now jeopardized.”


Family and Relatives of Park Nam-gi Mostly Deceased
Most of the family and relatives of the late Park Nam-gi are known to have died after being transferred to labor detention centers. The former director of the Planning and Finance Department was executed on charges of causing the national crisis by taking the leading role in introducing and implementing the currency revaluation measure. His family and relatives, who had enjoyed their well-off life in Pyongyang before the imprisonment, could not endure the appalling conditions at the detention centers and most of them died after suffering from illness or malnutrition. Thirty-eight people in total are known to be sent to the centers, and only two females survived among the late Park’s immediate family. These two women, known for their good looks, managed to maintain a good relationship with the officials in charge. Many of the others either committed a suicide after suffering from the harsh persecution or died from severe malnutrition and various kinds of illness.

People related to the other officials who were executed with Park are in the similar condition. Those deported to the labor detention center under the jurisdiction of Yoduk County Police Department in South Hamgyong Province and No. 22 Detention Center in Hoeryong City mostly deceased after suffering from severe malnutrition.

Upon hearing the news, Pyongyang officials were enraged. They are saying that how foolish it would be to remain loyal to the country when a person (referring to the late Park) who devoted himself to the affairs of the nation ends up being executed and their innocent family and relatives have to face the tragic ending.


Housing Assignment to Single Women above 35

There was an announcement that there will be housing assignments for single women above the age of 35 from this year on, and it will be also possible for them to be the head of one-person household. A party official said the decision was made because of the increase of unmarried women in Pyongyang, and expected that housing assignment for single women will be easier once the project for building apartments for 100,000 households is successfully completed. For reference, it is extremely difficult for people who are not married to be assigned housing. Sometimes single men are assigned housing after a long wait, but it used to be the case that single women were not eligible for housing assignment to begin with.


[Special Series] Conditions for the Strong and Prosperous Nation, 2012 (3)
Editor’s Note:

The D-day is April 15, 2012. Less than a year left. Can North Korea really open the grand door of the Strong and Prosperous Nation? More than any others, those responsible for it must be extremely anxious under the scrutiny of North Korea watchers. They soon have to come up with something tangible that signals the opening of the Strong and Prosperous Nation to their domestic and international audience. We have asked North Korean officials what are the conditions for the Strong and prosperous Nation. They mentioned three things in common: food, electricity, and the completion of the 100,000 housing unit construction in Pyongyang. These are the conditions directly linked to livelihoods and economic development. In principle, the Strong and Prosperous Nation is another name of a rich and solid nation based on the security of the current regime. We are launching a series of three editorials that examine the direction for the Strong and Prosperous Nation the North Korean leadership has set.

We have recently observed a very busy movement of the North’s leadership. It seems that a series of new policies are announced after many rounds of meetings. One can detect some sense of solemn determination in the new orders, but the reactions of the hands-on officers are not really enthusiastic. It might be that it is difficult to complete all the assignments only with the strong ‘protect the Great Leader with death’ spirit. The reign of terror has limitations. What kind of leadership will the North government take to open the door of the Strong and Prosperous Nation? Here, we try to analyze the challenges they are facing through their views. When understanding their contradictions and limitations clearly, we can better figure out our roles for unification.

1. We must solve the food problem.
2. Make every effort to supply electricity.
3. Dream of building 100,000 housing units in Pyongyang.

The Dream of Building 100,000 Housing Units in Pyongyang
Can North Korea achieve its dream of building 100,000 housing units in Pyongyang, another symbol of the Strong and Prosperous Nation? This spring, while everyone in the nation was mobilized to work in collective farms, residents in Pyongyang, including members of universities, factories, and other business organizations, were sent to the construction sites of 100,000 housing units. In this year’s New Year’s Day Joint Editorial, the government, emphasizing the importance of building 100,000 housing units in Pyongyang, stated, “With our everlasting deepest love for our country, we must guarantee the highest quality of the construction outcome” as it ordered to increase the production of construction materials. While only a fraction of the workforce from large factories and business organizations participated in the construction, all the university students were mobilized to the construction sites following the Party order that said the robust young soldiers, the columns of national protection and construction of socialism, “should be present in every site of nation building battles and exhibit the heroism of the people, wielding the flag of Kim Il-sung Socialist Youth Alliance.” Now, the question is this: Is the progress of the construction on track?

Each ministry responsible for the 100,000 housing construction
There was the news circulating recently that the goal of the construction was revised to 2-30,000 housing units due to the shortage of construction materials. When asked about this, an official of Central Party immediately denied it. He said, although foreign investment was desperately needed, he had never heard of any decision on reducing the number of housing units to be built. Rather, he said there was an order giving construction assignments to each ministry due on October 10th, the anniversary of the establishment of the Party. Currently, every work unit is assigned with certain number of housing units and responsible for providing financial resources for their construction. These assignments are given to all across the board, including the Ministry of Foreign Trade, the Ministry of People’s Security, the Ministry of Business, the Ministry of Electricity, Coal and Industry in the cabinet, and all the other organizations and units including the Department of National Security, the Public Prosecutors Office, universities, and hospitals. This means each organization and business unit has to mobilize construction laborers and the food for them as well as cement and other construction equipment. The original plan was to construct 35,000 housing units in Yongseong, Seopo, and Yeokpo Districts in Pyongyang by April 2012 and 30,000 housing units in Mangyoungdae District by this year and additional 35,000 by April next year. It was known that there was a decision at the Supreme People’s Convention on April 10th to increase the construction budget by 15% for Heecheon Power Plant and the 100,000 housing units construction out of this year’s total national budget of 5,700 million dollars. However, the current situation cannot be improved by such a small increase in the budget.

An instructor at Kim Il-sung University that was assigned with completion of one building in Mangyongdae District said, “We are ordered to finish the construction planned for this year by October at any cost, and we are working towards it day and night. The Party, without supplying any food and construction materials, puts all the responsibility on us to complete our assignment no matter how we do it, be it collecting money within the unit, borrowing or stealing from somewhere else. They just push us to complete our assignment, and there is no way the construction can be done properly.” Only the Ministry of Foreign Trade and the Ministry of People’s Security are providing food to their workforce and making some progress. People mobilized for the construction from other units are having hard times without any food supply. At the news of the order given to overseas representative offices to bring food in, the instructor expressed his frustration with sarcasm saying, “What a quick response! They should’ve done this long before. We cannot provide with money and equipment only with our enthusiasm and loyalty to the Party. It is so frustrating that the Party constantly pushes us to bring something out of nothing just with our loyalty. They should at least provide us with food. Now that I am so hungry, I cannot do anything with enthusiasm. It is not only me. This is the general sentiment of the people mobilized for the construction.”

The key is to attract foreign investment
After all, the key to all the solutions is to attract foreign investment. Solving the food and electric power problem and realizing the dream of 100,000 housing unit construction are only possible if North Korea can attract foreign investment. This is why it created the Joint Investment Committee. China being the only way out, it is obvious that North Korea’s dependency to China will seriously deepen. In trade, the general analysis is that North Korea – China trade is replacing North – South Korean economic cooperation. Although some people anticipated the North Korea – China trade would decrease after the May 24th measure, the actual North Korean export to China in 2010 was 1,190 million dollars with 49.9% increase compared to the last year; and the increase in export was exceptionally high in the second half of the year. The export of some items that used to be major exporting items to South Korea, such as clothes, seafood, and mineral resources (anthracite), greatly increased. The low-cost North Korean labor export is also getting prominent. It is known that the North is negotiating a deal with China to send laborers to the Chinese economic development zones in Tumen and Hunchun. This signals the possibility of weakening the position of Kaesung Industrial Complex with the establishment of the Special Economic Zone linked to the Chinese development plan of three Northeastern provinces.

Following the order early this year of launching full scale joint businesses with China, there is a clear trend of all domestic organizations and business units trying to do business with China. A permission to go to China is easily being issued not only to trade officers but also to ordinary workers of restaurants and shops, provided that they pay 1,000 euro per month regardless of their status and business title. That means literally anybody who can afford 1,000 euro can go to China. Now, more than 100 people are crossing the border through Dandong customs office a day. North Koreans are desperate in trying to reach Chinese businesses and just want to set their feet in China regardless of the result of their business trips. It is not an exaggeration to say the streets of Shenyang and Dandong in China are crowded with North Koreans. North Korea is letting its people out hoping that this can solve the food situation or bring the needed money for the construction of Heecheon Power Plant and the 100,000 housing units.

Building 100,000 housing units, whose dream is it?
Most of all, the perception of China and the reality of North Korea has changed aggressively among the members of cabinet including ministers. In the past, when someone who had been to China talks about its development, they would simply ignore it and say, “There is nothing to see and learn in China. Our country is the best.” After visiting China a few times accompanying Chairman of National Defense Committee Kim Jong-il, their attitudes have changed. Seeing and hearing a lot in China, they came to realize the necessity of economic development, which made them more vocal in meetings. Members generally kept silent during cabinet meetings in the past, but now they tend to eagerly express their analysis of the problems and opinions as to which direction the country should move to. “You can clearly see their eagerness when they speak,” it is said of the ministers. Cabinet members say in one voice, “We will not open our door. Reform is the only way for us to go.”

The Organization and Guidance Department of the Central Party anticipates that next year is the best time to strengthen the next generation of leadership in North Korea because the international tensions will be kept low while the leaderships change in China, Japan, the U.S., and South Korea all in next year. The department tries to convince party members, saying “Our ultimate goal is to make a stable social environment and a pure and clean (with no rebels) revolutionary army. Making our society strong and stable at the cost of our lives and opening the door of a new era is the responsibility of every member of the Party. Let’s continue our loyal support to General Kim Jong-eun as we have done to our Great General and be pioneers of the era of our nation that will be stronger than ever. Let’s open a new era of Chosun which no one can dare to touch and show a new strong nation to the world.”

How can this goal be reached? One of the officials who attended the meeting of the core members of the Party and the government said, “We should quickly build a stronger relationship and trust with China to keep our friendly and special relationship. With China’s trust in us, we should launch full scale joint businesses with it not only in economy but also in politics and military operations. It is true that one of the reasons we have given the Rajin-Seonbong Special Zone, Wihwa Island, and Hwangguempyong to China was to overcome the foreign currency crisis caused by the international sanction against us, but it was also to make a closer relationship with China so that they can see our business is directly linked to their profits.” This means that North Korea’s plan is to make a link with China to pursue two rabbits of regime security and economic development.

Based on the blood alliance with China, North Korea also has a strategy to bring Russia on board to form a triangular alliance against that of South Korea, the U.S. and Japan. While keeping the tight tension between the two alliances, it will seek to quickly build up its national economy and strengthen its national security. The plan is in next year, while major countries are busy with their domestic presidential elections, North Korea will proceed with its own power succession process smoothly and solidify the new power structure. That is why the housing unit construction project is regarded as so important. It is not just to solve the housing problem in Pyongyang. The completion of the project is a declaration to the world of a new leader opening a new era as well as a great opportunity to exhibit a great achievement of the new leader to his people. Then, the dream of building 100,000 housing units in Pyongyang clearly does not seem to be the one that the city’s residents are dreaming of.
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