No strings attached as the New York Philharmonic plays in Pyongyang

The New York Phiharmonic held a concert in Pyongyang in  26 Feb 2008 to the hopes of better relations between the U.S. and the DPRK. At least that’s how the American side – whose memories of Ping Pong diplomacy probably resonate in the background - saw it as the largest contingent of United States citizens since the Korean War appeared north of the 38th parallel (here).

Then how might the North Koreans have seen it? Evidently, among those present “There were those who sobbed and wiped off their tears” (here), but most Koreans could not even access a transmission (here). Kim Jong-il did not attend, but is likely to profit in one way or the other (here). The concert was only possible due to the “Dear Leader”, and furthermore he managed to draw positive – or at worst non-negative - attention to his regime (just guess who made it to the TIME Asia edition cover page).

Below is the NY Phil playing the Korean folk song Arirang (but also see this Youtube link for Jang Sa-ik’s version). As conductor Mr. Loring Maazel put it: “There’s no sides – there’s no North and South in ‘Arirang” (here). The NY Times has a good review of the first time an American cultural organization appeared in the North (here).

(Video courtesy sangdoo2)
 

As prices rise in China food aid to North Korea falls

World food prices has risen dramatically over the last period and moves on to affect even reclusive North Korea. Globally, China may hold the key to world food prices (Jing Ulrich, here), but biofuels (IMF, here) and poor harvests also play significant roles (see also this great FT site on food prices). As China takes the world on a ride of agflation (the Economist, here), or simply stops exporting deflation, this also shows how North Korea is in it with the rest of us – or at least the less well off parts of the world.

A Hankyoreh article (here) says up until now an average of 1,200 tons of food has crossed the border at Dandung, Liaoning Province, daily! As of 2008 the Chinese government has not issued any new export permissions. The article says 80 to 90 per cent of Chinese food aid, which has now completely stopped, used to pass through Dandung.

For food aid in general, the World Food Programme fears cut in assistance, and the Food and Agriculture Organisation estimates poor countries will have to pay 35 per cent more for their cereals imports (here). The only benefactors of the rising food prices must be the protected South Korean farmers whose products will seem a little bit less expensive as consumers lately (2004-06) have paid more than two and a half times the prices on world markets (OECD, here).

Power shakeup in North Korea as investigations continue

The top echelon of power in the DPRK is under investigation (also Feb 11. post). Investigations of the party, cabinet, and the military, are being undertaken and overseen by the Guidance Department under the direct control of Kim Jong-il. It has the authority to investigate any organisation, and is known to have been involved in leading an investigation only twice before. In February 1984 the National Security Agency came under investigation, and its first director Kim Byung Ha committed suicide, while key officials were sent to prison camps. In 1997 several of Kim Il-sung’s close associates and thousands of high officials who followed Kim Il-sung were targeted and punished North-Korean style (Daily NK).

Also involved in inspections are the Defense Security Command of the People’s Army and the National Security Agency. They cannot, as the Guidance Department, extend into wideranging inspections as they are limited to the types of organizations and cadres they may investigate.

It has been discovered US$ 20 million at the house of the head of the National Economic Cooperation Committee (NECC) and the National Economic Cooperation Federation (NECF), Mr. Jung Un Up. He is currently under questioning, and so is staff in China and Russia. The money may have been intended as funding for the DPRKs legitimate overseas business, or could simply be accumulated bribes or otherwise “re-directed” funds (here). The amount proximates that of the registered capital of a conglomerate such as Pugang, and is a US$ 5 million short of the funds involved in the Banco Delta case (here).

Angry Kim Jong-il orders probe of state graft

This Korea Herald article (Monday, February 11 2008) reports that corruption claims has instigated Kim Jong-il to start investigating the United Front Department of the Korean Worker’s Party, as well as the National Economic Cooperation Council, which handles business with South Korea entrepreneurs.

North Korea is conducting a major investigation into corruption at state agencies which handle business projects with South Korea and aid from Seoul, a report said.

Its leader Kim Jong-il ordered an investigation into the ruling communist party’s United Front Department, following allegations that some top party and administration officials took bribes as they promoted the business projects, Yonhap News said.

“The probe was launched as National Defense Commission Chairman Kim Jong-il said there was a lack of supervision over the United Front Department, although lots of suspicions were raised over the department’s corruption,” one source told Yonhap News.

Kim became furious after hearing claims that some party and government officials pocketed bribes and diverted food and other aid from South Korea to the black market.

“Even those who have eaten for free 1 gram of flour from South Korea should cough it up,” one source in Seoul quoted a North Korean official as saying.

Also under investigation is the National Economic Cooperation Council, a government body which handles business with South Korean entrepreneurs, the sources said.

They said its chief, Jeong Woon-eop, is under arrest pending investigation into claims that he took “huge amounts” of bribes.

The rare move comes as South Korea’s President-elect Lee Myung-bak said he would review cooperation projects with the North, and make it harder for the communist neighbor to receive aid by linking handouts to progress on its nuclear disarmament.

The hard-line communist state suffered a famine starting in the mid-1990s which killed hundreds of thousands of people. Since then, it has relied on outside aid to help feed its people.

South Korea is a major donor, providing 400,000 tons of rice aid a year. It also promotes joint business projects under its Sunshine engagement policy with the North.

Human Rights Watch researcher Kay Seok said last year that much of Seoul’s rice aid failed to reach the hungriest because of corrupt officials and a lack of proper monitoring.

Economic indices for the two Koreas, 1990-2006

I just finished downloading the Bank of Korea’s North Korea Economy data (including 남북한의주요경제지표비교) 1957-2007 for the two Koreas. Due to some empty cells, perhaps it could be called Swiss cheese accounting?

I saved the data in a downloadable xls. file (download).