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North Korea: Witness to Transformation

Slave to the Blog: The Only Band that Matters Edition

by | January 8th, 2013 | 06:33 am
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London calling:  News reports that the BBC was contemplating initiating a broadcast service aimed at North Korea got me thinking about a Clash-themed slave to the blog post.  Obviously the more outside information that reaches North Korea the better, and given the US fiscal situation, it would be surprising if RFA got a big boost.  Some nearby transmitters would not cost much money and could help, Mr. Abe.

Should I stay or should I go: Yesterday, my partner Steph Haggard posted his analysis–or head-scratching–about the trip to North Korea by Google honcho Eric Schmidt. Needless to say, if I were in Mr. Schmidt’s shoes, I might approach this trip with some ambivalence. All you do is hitch a ride to North Korea, and for your trouble you get called “a useful idiot” by Senator John McCain. In the interest of full disclosure, Google is a corporate supporter of the Peterson Institute for International Economics.

Complete Control, Clampdown, Remote Control, I Fought the Law: Who knew the Clash discography contained so many potentially North Korea-themed tracks?  The New York Times recently ran a piece by Choe Sang-hun on the growing difficulty of smuggling refugees out of North Korea. Increased policing on both the North Korean and Chinese sides of the border, including enhanced monitoring of cell phone traffic, have raised the costs of getting people out.  The number of refugees entering South Korea—an imperfect indicator of the numbers leaving North Korea given the long, and variable periods of stay in third countries– fell more than 40 percent in 2012, to 1,509. About 24,000 North Korean refugees currently reside in the South. Nonetheless, as long as conditions in North and South Korea remain so disparate, and bribes remain a significant share of the income of police and other officials in the border region, North Koreans will continue to escape the country. Maybe those guards have been listening to Career Opportunities.

Lost in the Supermarket:  On the other end of the socio-economic spectrum, the debit cards discussed in earlier posts are proving to be popular with Pyongyang’s elite.  According to reporting by Kim Young-jin in the Korea Times, two options exist, issued by two different North Korean banks. Apart from whatever convenience they provide, the cards create an incentive for North Korean residents to turn in their foreign exchange and, by extension, give central authorities greater control over the finances of the economy. According to the report “Store shelves are stocked with products including previously rare items such as bananas and pineapples.” The piece goes on to speculate that “Pyongyang may issue a new card that only allows the use of the local won in a bid to prevent further devaluation. According the Japan’s Mainichi Shimbun, state salaries will be paid through the cards.” Speaking of career opportunities, concentrating all that foreign cash in centralized locations could inspire a new generation of Bankrobber(s).

The incentive to hoover up that foreign exchange is only growing in an economy that appears to be dollarizing apace.  In a recent paper, South Korean economists Yang Moon-soo and Kim Seok-jin argue that transactions are increasingly occurring in dollars for both high-value items such as houses as well as other goods. At a conference in Seoul this fall, Yang indicated that “It is almost becoming abnormal in the North to hold more than a certain amount of bank notes in North Korean won,” according to Yonhap.

Rock the Casbah: Moving on to foreign affairs, Yonhap reports that China is claiming that it is tightening up inspections of North Korean cargoes in response to reports that in May, South Korean authorities in Busan found 445 graphite cylinders believed to be of North Korean origin on a freighter headed for Syria.  The parts can be used in the production of missiles.  According to the Asahi Shimbun, in a subsequent August incident, Japanese authorities seized “materials suitable for uranium enrichment or missile development” again believed to be of North Korean origin. The Chinese ship was bound for Myanmar.

Know Your Rights: In the meantime, the UN general assembly condemned North Korea, the aforementioned Syria, and Iran for gross human rights violations. A representative of the North’s UN mission dismissed the resolution as “as a document of political plot and fabrication.”

There’s got to be a story for Straight to Hell. Maybe one of you can suggest one.