‘Murky’ drug trade: How did North Korea become a meth hub?

8 12 2013

Foreign_nationals_suspected_of_smuggling_methamphetamines_from_NK(By Geoffrey Cain, GlobalPost Contributor, 7 Dec. 2013SEOUL, South Korea – Extradited from Thailand, the five suspects appeared before a New York court last month to face charges of a sensational plot: smuggling crystal meth from enemy number one, North Korea.

The five suspects – from China, the U.K., the Philippines and possibly Slovakia – stand accused by the Drug Enforcement Administration (DEA) of conspiring to sell 40 pounds of 99 percent pure crystal meth to an undercover agent. They pleaded not guilty, and will appear in court again in early December.

You wouldn’t guess it, but North Korea – run by the world’s most infamous authoritarian regime – happens to be a colossal supplier of a highly potent but moderately priced form of crystal meth, experts say.

It comes in the form of “Ice,” the powerful, smoke-able type that delivers a near-immediate jolt to the brain. The drug is primarily made for export, ferried through China and, from there, distributed around the world. But some North Koreans – despite the watchful eyes of their government – are avid consumers of crystal meth too.

Two North Korean refugees in Seoul told Global Post that, in a country suffering from poverty and food shortages, the drug is a much-needed appetite suppressant, offering a means of self-medication to cope with the hardship.

Near the Chinese border, they said, Ice was widely available on the black market. It was popular among private traders and their families, who had no problem inhaling or selling it in outdoor markets with a bribe to authorities.

“Life was hard, people were hungry, and we needed the drug,” said one female North Korean defector in Seoul, who fled to the Chinese border region in the mid-2000s. She admitted to smoking Ice multiple times, and once gave smaller doses to her two boys, aged 11 and 13.

“My family was a little wealthier, so we could afford it, but even poor people did it too,” she said. “It was a popular drug.” She asked not to be named, fearing reprisals against family members still in the country.

Of course, various types of amphetamines enjoy some popularity in developing countries in Asia and Africa, where laborers, for instance, need energy to work long hours on scant meals. Even South Korea, which leaped from poverty to riches in about 30 years, was once a big-time producer of crystal meth.

This booming trade, now in private hands, was once a fundraising arm for the cash-strapped government, experts say. North Korean embassies trafficked in hashish as far back as the 1970s.

After the fall of the Soviet Union, the economy collapsed, resulting in a devastating famine. By the mid-2000s, a nascent class of merchants flourished, peddling just about any illegal product you could imagine, including drugs and pirated DVDs.

“These days, more and more freelancers and professional drug dealers are taking over this murky operation of delivering the drugs produced in North Korea, packed in Northeast China, and smuggled via South East Asia to Australia, America and Europe,” said Leonid Petrov, a North Korea watcher at the Australian National University in Canberra. “Many North Korean scientists began to moonshine in private laboratories producing the similar high-quality product for domestic consumption and illicit export,” he said.

Since crystal meth laboratories are smelly, they would have to be away from populated towns. From a business standpoint, moving the contraband from North Korea to China would be realistic and highly profitable.

Chinese Mafiosos probably hand over supplies, while North Koreans, in the safety of their country, synthesize the drugs in factories near the southern banks of the Tumen River that marks part of the boundary between North Korea, China and Russia, writes Andrei Lankov, a North Korea specialist at Kookmin University in Seoul. That’s a swift change from a lucrative narcotics trade that, a decade ago, was mostly state-run.

Still, it’s not clear whether the group of five suspected dealers had the resources and connections to move meth from North Korea all the way to North America. Prosecutors accuse the group of trafficking and selling North Korean drugs in Southeast Asia, a more reachable market.

One suspect even boasted that his organization was the only one that could get the job done. “Because before, there were eight [other organizations]. But now only us, we have the NK product,” Chinese suspect Ye Tiong Tan Lim was quoted as saying on the recordings.

The suspect said that his group stockpiled one ton of North Korean meth in the Philippines, anticipating an unconfirmed decision by North Korea to destroy meth labs under pressure from the U.S. The drugs would be shipped through Thailand, according to prosecutors.

The two North Korean defectors told GlobalPost they were unsure whether laboratories have been destroyed. One study in the North Korea Review suggested that the trade was indeed moving from an array of factories to the underground.

But, explains Petrov, “As with everything that comes out of North Korea, the veracity of this story is 50-50.”





Russia Friendship Section Added to ARIRANG Mass Games

23 07 2013

NK-Russia-friendship-ARIRANGby Chad O’Carroll (NK News, 23 July 2013) Headline image by Koryo Tours.

SEOUL – North Korea has added a chapter on Russian friendship to the Arirang Mass Games, a source who attended the show on Monday night told NK News.

The new section includes a banner that says “Russian friendship [carries on] century by century” and represents the first time North Korea has included a section specifically focusing on relations with Russia during its Mass Games.

“The role of the USSR in the liberation of Korea from Japanese colonial rule has always been acknowledged by Pyongyang. But with this news perhaps Pyongyang is trying to play the Russian card in its diplomatic game with China,” Dr. Leonid Petrov, a researcher at Australia National University told NK News.

Before the collapse of the Soviet Union, North Korea often used its relationship between Moscow and Beijing to gain competing concessions from the two superpowers. Dr. Petrov speculates that following increasing reliance on China in recent years, the DPRK might now be using Arirang to fan a closer relationship with Russia.

“Kim Jong Un desperately needs closer links with and more developmental aid from China. The best strategy in this game would be that he use the tried and tested policy of maintaining ‘equidistance’ from Beijing and Moscow,” Dr. Petrov explained via email.

In addition to the new Russia chapter, the manner in which China was presented was also different, the source said. “The Chinese part was shortened this year, they still had the friendship section but it seemed a lot shorter. I didn’t see so much about the pandas last night,” the source told NK News after watching the inaugural show.

The Mass games normally includes a major chapter on North Korea’s relationship with China, though experts had predicted it was likely this would change following an apparent “frosting” of diplomatic relations between Beijing and Pyongyang in recent months.

“[North Korea has] been so angry with China this year, do they want to send a message to the Chinese by dropping the friendship chapter? Or if there is a big overhaul and thus a change in the narrative story of the performance, perhaps this is a good opportunity to drop the awkwardly placed chapter in a fairly natural way,” Andray Abrahamian, a Director at Chosun Exchange, told NK News.

Another notable change to this year’s proceedings was the inclusion of a short chapter on North Korean relations with the entire world. The performers formed an olive branch, possibly as a metaphor of the country’s own self-professed willingness to seek better relations with the rest of the world.

“It was very brief, just a glimpsing moment – but it was interesting and a change from last year,” the source told NK News. The theme of this year’s mass games is focused on the 60th anniversary of the Korean War (known as the Fatherland Liberation War in North Korea) and the 65th anniversary of the founding of the DPRK.

The Arirang mass games, a 120,000 person gymnastic and artistic performance, started in 2002, and tells a “grand story of a divided peninsula and how North Korea became a dignified nation,” according to North Korean state media.





North Korea rockets and artillery ‘target’ US bases

27 03 2013

North-Korean-Threats-Propaganda(by Tania Branigan, The Guardian, 26 March 2013) North Korea said it had ordered its rocket and long-range artillery units to be combat-ready, targeting military bases in the US and American bases in the region, in its latest fiery warning.

Pyongyang has issued stern admonitions and threats on an almost daily basis since the UN security council tightened sanctions over its latest nuclear test and the US and South Korea began joint military drills.

“From this moment, the supreme command of the Korean People’s Army will be putting into combat duty posture No 1 all field artillery units, including long-range artillery units and strategic rocket units, that will target all enemy objects in US invasionary bases on its mainland, Hawaii and Guam,” said a statement from the North’s military supreme command, carried on the state’s KCNA news agency.

The South Korean defence ministry said it was monitoring the situation but had detected no signs of unusual activity by the North’s army. Seoul and Washington say their current military exercises, which will continue until the end of April, are strictly defensive.

“It’s attention-seeking behaviour. It’s like a child in a candy shop: if you haven’t bought him a lolly and don’t pay attention to his tantrums he tries to intimidate you with things – even if they are self-harming,” said Leonid Petrov, an expert on North Korea at the Australian National University.

“North Korea really doesn’t have the capability to strike the US, though they could strike US interests in north-east Asia and South Korea. They can spur another round of the arms race, as they have already done successfully. I don’t know who benefits from that, but it’s obviously not the North, because they can’t afford it.”

He added: “It is more of a message to the domestic population. Despite all the promises of the last year about people leading a better life, the imperialists are about to attack so you have to forget that. The North is trying to seal the loyalty of the people, insulate the country and buy more time for the regime to survive.”

China’s foreign ministry spokesman Hong Lei told reporters at a daily briefing that it hopes all sides on the Korean peninsula can exercise restraint.

Reuters reported last week that China did not export any crude oil to the North in February, the first such instance of its kind for a year, and there have been reports of tightened restrictions on trade.

China is the North’s main ally and Pyongyang remains heavily dependent on trade and aid with its neighbour. But many analysts say it is too early to tell whether Beijing’s approach has changed and stress there is no sign of a fundamental or long-term shift in policy.

“I think philosophically they don’t really like sanctions and when I talk to the Chinese none of them seem to think sanctions will work,” said John Delury, an expert on Chinese-North Korean relations at Yonsei University in Seoul.

He noted that a clampdown on cross-border deals may be part of a more general desire to clean up trade, for example.

But he added that ties between the two countries appeared weaker than they were towards the end of Kim Jong-il’s rule, probably reflecting Pyongyang’s concerns about the relationship as much as Beijing’s.

“They were getting into a red zone where all the economic ties and diplomatic ties were with China,” he said.

Despite the military alert, Kim Jong-un has found time for civilian-focused duties as leader in recent days, according to the North’s media.

The Rodong Sinmun newspaper reported that in addition to his visits to the army, he toured a new restaurant boat on Sunday, “feasting his eyes on the deck and handrails around it” and expressing concern that the view and air-conditioning should be satisfactory.

See also ‘Combat Ready’ North Korea Threatens To Attack U.S. Bases (NKnews.org)

Listen to my interview given to RADIO JONES on Thursday, 28th March 2013, where I expressed my views on the ongoing stand-off between North Korea and the US-allied South Korea. Alternatively, tune in on “Listen Live” at www.talkfm.com/listen-live.html produced by Porcelain Audio.





Tourists in North Korea Unable To Send Postcards Home Due To “Sanctions”

21 02 2013

No-Postcards-to-North-Korea(NKnews.org, 20 February 2013)  Western tourists in North Korea have been banned from sending postcards home to friends and loved ones, supposedly as a result of “sanctions” passed in recent days and weeks.

In particular, the new “sanctions” make it impossible for European tourists to send postcards home.  The development was reported to NK NEWS by two separate tourist groups who were in the country during the nuclear test and its aftermath.

When trying to send cards home, North Korean guides told European visitors that they were not allowed to send the materials due to “sanctions” passed in recent days.

One North Korean group leader told his visitors that the ban was a result of “Chinese sanctions”, though this looks unlikely because American tourists in another group were allowed to send their own cards home.

When asked for further details, North Korean tourist guides explained that the ban on sending to Europe was because mail would not be delivered to certain destinations. They said that they did not know how long the limitations would last.

While the European Union did apply new unilateral sanctions on North Korea in recent days, none appear to have been focused on the North Korean postal system. These latest sanctions were instead focused on increasing travel bans, asset freezes, and the number of EU sanctioned companies.

It is not clear which countries are behind the latest development, if any. There also remains the possibility that this could be an arbitrary measure on the North Korean side.

Reacting to the potential postal sanctions, Dr. Leonid Petrov, a North Korea Expert at Australian National University said,

    Sanctions never bring anything good and often bite both sides. Sanctions against North Korea, paradoxically, help the Kim’s tyranny survive. Totalitarian regimes can exist only in isolation, where common people have little or no exposure to outside information. The whole philosophy of North Korea’s recent nuclear and missile antics is designed to keep the country isolated.

North Korea has long limited the amount of mail coming in to the country and many third countries have controls over what can be sent there in packages. However, postcards and small letters being sent from the country have not traditionally been restricted. If the latest ban is a result of external sanctions, they would seriously undermine the spirit of the Universal Postal Union, a multilateral postal framework.

As a UN member, North Korea joined the Universal Postal Union in 1974, but has direct postal arrangements with only a select group of countries. But one objective of the union is that, “freedom of transit shall be guaranteed throughout the entire territory of the Union.” This has historically meant that items like postcards and small letters should be deliverable, regardless of where they are sent from.

In the United States, mail is regulated by the Office of Foreign Assets Control and the agency limits mail to North Korea solely to First-class letters/postcards and matters for the blind. All merchandise, currency, precious metals, jewelry, chemical/biological/radioactive materials and others are prohibited.

In related news, a business visitor who returned from the DPRK yesterday told NK NEWS that his North Korean partners were “extremely worried” about what China might do in reaction to the latest nuclear test. He said among his DPRK based partners fear that China could be “deadly serious” about punishing Pyongyang through sanctions that make ordinary business harder to conduct.

North Korea conducted its third nuclear test last week, in face of significant international pressure. The move was instantly condemned by the UN and many observers believe that further sanctions will be applied as a punishment for North Korea in the weeks ahead.





Chinese Pressure To Halt North Korean Nuclear Test Increases

7 02 2013

Tsar_Bomba(6 February 2013, NKnews.ORG) With North Korea threatening to go beyond a third nuclear test in response to what it sees as “hostile” sanctions imposed after the December rocket launch, Chinese pressure to halt a North Korean nuclear test appears to be mounting at considerable pace.

Building on high level talks held yesterday between Washington and Beijing, Chinese Foreign Ministry spokeswoman Hua Chunying told reporters today that Beijing is “extremely concerned by the way things are going…We oppose any behavior which may exacerbate the situation and [urge] relevant sides to exercise restraint and earnestly work hard to maintain peace.”

Chunying’s comments came following an agreement  yesterday that the U.S. and China would “work together” to deal with the pending nuclear test, made public after U.S. Secretary of State John Kerry and China’s Foreign Minister talked by phone for the first time since Kerry took office.

On the subject of the call, State Department spokesperson Victoria Nuland said that both China and the U.S. agreed that North Korea should face “further consequences” if it violates UN Security Council resolutions with another test. Nuland also emphasized that the conversation between the two were “remarkably similar” to ones Kerry had in previous days with his Japanese and South Korean counterparts.

Beyond publicized Sino-American rhetoric, a senior Seoul diplomat told Yonhap News that he was aware that China was making its “own efforts” to persuade North Korea to cancel the test, although he did not elaborate on what those efforts were. The diplomat also said that China was taking the nuclear test “seriously.”

Outside of the diplomatic realm, an editorial in the English language Global Times today detailed Chinese displeasure even further, warning that Pyongyang would pay a “heavy price” for a third nuclear test and that China should “shatter any illusions Pyongyang may have” about not being punished.

While the editorial did note that Beijing would unlikely support the type of heavy sanctions that the U.S. and South Korea will likely demand in the event of a test, it underscored that China should support “reduced assistance” to North Korea and said that, “if Pyongyang gets tough with China, China should strike back hard.”

But despite all of the increasing rhetoric, North Korea expert Leonid Petrov today NK NEWS that in reality China is probably not that concerned about a further nuclear test.

Beijing policymakers know better than anyone how to benefit from Pyongyang’s insecurity and increasing international isolation. More sanctions against the DPRK means better deals for Chinese entrepreneurs operating in North Korea and increased dependency of Kim Jong-Un’s regime on China’s security assurance. A nuclear armed and unmanageable Pyongyang poses no threat to China but keeps its regional competitors anxiously overspending on their own national defense and security.

However, Chinese experts quoted yesterday in the Hong Kong daily Ming Pao have different thoughts. Shen Dingli, Executive Deputy Dean of the Institute of International Affairs at Fudan University, said that the planned nuclear test and rocket launch had already harmed China’s core interests, and that Pyongyang should be prepared to “bear the consequences” and “prepare itself for tougher international sanctions.”

In the same report Fan Jishe, a researcher on U.S. studies at the Chinese Academy of Social Sciences, went further and criticized Pyongyang for “embarrassing China” and “impeding [the progress of] Sino-U.S. relations.” He also criticized North Korea for implicitly blaming China for its “blind obedience” to Washington in the recent United Nations condemnation of the December rocket launch.

Amid the increasing pressure, Yonhap News suggests that the North Korean media’s decision to avoid citing Chinese media or report on Chinese news in recent weeks shows a growing spat between two countries once regarded as being as close as “lips and teeth”.  A screening of KCNA, Rodong Sinmun, KCTV, Radio Pyongyang and Chosun Central TV showed that following the passage of the Chinese supported UN Security Council Resolution on Jan. 23, there had been almost no mention of China in the North Korean media.

Tensions between China and North Korea have been on the increase recently, with public disagreements bubbling over in areas even outside of the nuclear realm. Less than two weeks ago Pyongyang reportedly hit out at Beijing for allowing reports to circulate that Kim Jong Un may have had plastic surgery to look like his grandfather Kim Il Sung.

Some suggest that China is the most important party in efforts both to dissuade North Korea from conducting a nuclear test, though others suggest Beijing’s influence is much more limited than leaders in the U.S. and South Korea like to think.

China has been traditionally uncooperative in pushing North Korea too hard, officially due to worries over fanning political and further economic instability in its neighbor.

To date, Pyongyang has conducted two nuclear tests, the first in 2006 and the second in 2009. Both times China ensured that sanctions on North Korea avoided inflicting too much economic damage.





Rare earths bankroll North Korea’s future

7 08 2012

Image(By Leonid Petrov, Asia Times On-line, 7 August, 2012)

Those who travel to North Korea regularly might have noticed that the last couple of years have brought significant improvement in the country’s economic situation. Newly built high-rise apartments, modern cars on the roads and improved infrastructure come as a surprise to visitors. It begs the question, where does Pyongyang get the money from?

The ambitious rocket and nuclear programs, which North Korea continues to pursue despite international condemnation, are expensive and harmful to its economy. International sanctions continue to bite the Democratic People’s Republic of Korea’s foreign trade and investment prospects. Regular floods and droughts, animal epidemics and other natural disasters hit the fragile economy even harder.

According to expert estimations, the DPRK should have ceased to exist in the mid-1990s, after the Communist Bloc collapsed and Kim Il-Sung died. But North Korea has fully recovered after the famine and even shows steady signs of economic growth.

Foreign critics looked everywhere with hope to unravel the mystery. After 2008, the stalled inter-Korean cooperation left North Korea without South Korean financial assistance. Western humanitarian aid has also been exhausted or reduced to a number of goods with little market value. Although the volume of North Korea’s foreign trade is negligible, the domestic economic situation continues to improve. Pyongyang is routinely suspected of violating international sanctions by trading arms, smuggling drugs, counterfeiting US dollars and other crimes.

These activities would be expected to refill the impoverished state with badly needed foreign exchange. However, anti-proliferation operations and bank account arrests have never disclosed anything criminal nor did they manage to answer the main question: where does the money come from?

In fact, North Korea is sitting on the goldmine. The northern side of the Korean peninsula is well known for its rocky terrain, with 85% of the country composed of mountains. It hosts sizeable deposits of more than 200 different minerals, of which deposits of coal, iron ore, magnesite, gold ore, zinc ore, copper ore, limestone, molybdenum, and graphite are the largest and have the potential for the development of large-scale mines.

After China, North Korea’s magnesite reserves are the second-largest in the world, and its tungsten deposits are almost the world’s sixth-largest. Still the value of all these resources pales in comparison to prospects that promise the exploration and export of rare earth metals.

Rare earth metals are a group of 17 elements found in the earth’s crust. They are essential in the manufacture of high-tech products and in green technologies, such as wind turbines, solar panels or hybrid cars.

Known as “the vitamins of high-tech industries,” REMs are minerals necessary for making everything that we use on a daily basis, such as smartphones, flat-screen TVs, and notebook computers. Some rare earth metals, such as cerium and neodymium, are crucial elements in semiconductors, cars, computers and other advanced technological areas. Other types of REMs can be used to build tanks and airplanes, missiles and lasers.

South Korea estimates the total value of the North’s mineral deposits at more than US$6 trillion. Not surprisingly, despite high political and security tensions, Seoul is showing a growing interest in developing REMs together with Pyongyang.

In 2011, after receiving permission from the Ministry of Unification, officials from the Korea Resources Corp visited North Korea twice to study the condition of a graphite mine. Together with their counterparts from the DPRK’s National Economic Cooperation Federation they had working-level talks at the Kaesong Industrial Complex on jointly digging up REMs in North Korea. An analysis of samples obtained in North Korea showed that the type of rare earth metals could be useful in the manufacture of liquid crystal display (LCD) panels and optical lenses.

The joint report also revealed that there are large deposits of high-grade REMs in the western and eastern parts of North Korea, where prospecting work and mining have already begun. It also reported that a number of the rare earth elements are being studied in scientific institutes, while some of the research findings have already been introduced in economic sectors. The North built a REM reprocessing plant in Hamhung in the 1990s but has been unable to put the plant into full operation due to power and supply bottlenecks.

Rare earth minerals are becoming increasingly expensive, as China, the world’s largest rare earth supplier, puts limits on its output and exports. In February, China’s exports of rare earth metals exceeded the price of $1 million per ton, a nearly 900% increase in prices from the preceding year.

China, which controls more than 95% of global production of rare earth metals, has an estimated 55 million tons in REM deposits. North Korea has up to 20 million tons of REM deposits but does not have the technology to explore its reserves or to produce goods for the high-tech industry. Nevertheless, in 2009 the DPRK’s exports of rare metals to China stood at $16 million, and as long as someone invests, exports will continue to expand.

This growing rise in REM prices and strong demand gives the young leader Kim Jong-Un a good chance to improve the economic standing of North Korea without actually reforming its economy.

Following the Gulf States’ and Russian example of catching the wind of rising oil prices in their sails, Pyongyang is likely to follow suit, becoming rich and powerful through the exploration and sale of natural resources. The export of rare earth metals will replenish the state coffers; stimulate the loyalty of the elites to Kim Jong-Un’s autocratic rule; and secure the growth of consumption among the ordinary people.

Relations with South Korea, China and Japan are also likely to improve due to the large scale cooperation on exploring, processing and utilizing REMs – the mineral of the 21st century.

Pyongyang needs international assistance through joint projects to explore its mineral resources, and mainly its rare metal and rare earth minerals. North Korean and Chinese teams have been cooperating to explore mineral resources in the DPRK for many decades. Seoul has recently expressed interest in working with Pyongyang on mining projects and technological innovations.

Perhaps, Japan and Taiwan, which look for alternative REM supplies for their micro-processor and other cutting edge industries, might also decide to contribute to the development of this economically promising venture.

Paradoxically, the promise of Kim Jong-Il might soon come true and North Korea may become a “rich and powerful state” – rich in natural resources and empowered by nuclear technologies. In that case, North Korea might not even need to go through a painful and potentially destabilizing economic reform.

Although the political regime will remain dictatorial, the idea of unification with the South by war or absorption will soon become meaningless. The purges of political elites and the mass starving of ordinary people in North Korea will cease. Gradually the level of prosperity in the two halves of the divided Korea will start equalizing, opening more opportunities for greater exchange and cooperation.

Read this article in Korean here… 북한의 숨겨진 비장의 카드…

Largest Known Rare Earth Mineral Deposit Discovered

(Mining Weekly.Com 4 December 2013) SRE Minerals Limited announces the results of exploration and studies in collaboration with the Korea Natural Resources Trading Corporation of the Democratic People’s Republic of Korea

SRE Minerals Limited (“SRE” or “the company”) announced today their joint venture agreement with the Korea Natural Resources Trading Corporation for rights to develop all rare-earth-element deposits at Jongju, North Pyongan Province.

The joint venture company known as Pacific Century Rare Earth Mineral Limited has the rights under the joint venture agreement which includes the exploration, mining, beneficiation and marketing of all REE deposits in the Jongju area for the next 25 years with a further renewal period of 25 years.

Under the terms of the JV agreement SRE has also been granted permission for a National Rare Earth Mineral Processing Plant on site at Jongju, which is situated approximately 150 km north-northwest of the capital city of Pyongyang, within the North Pyongan Province, Democratic People’s Republic of Korea.

Leading Australian mining and geological consultancy, HDR Salva Resources Pty Ltd, has been SRE’s technical representative for the project and has been commissioned to access the mineralised potential of the Jongju REE target* with special reference to detailed mapping, extensive trenching and limited drilling.

HDR Salva Resources (Pty) Ltd.’s initial assessment of the Jongju REE Exploration Target* indicates a total mineralisation potential of 6.0 Bt (216.2 Mt total rare-earth-oxides including light rare-earth- elements such as lanthanum, cerium and praseodymium (mainly britholite and associated rare earth minerals). Approximately 2.66% of the 216.2 Mt TREO consists of heavy rare-earth-elements. A detailed classification of mineralised potential present in the Jongju REE Target* is presumed to be:

• 664.8 Mt @ >10.00% TREO,
• 1.1 Bt @ 4.72% TREO,
• 579.4 Mt @ 3.97% TREO, and
• 3.63 Bt @ 1.35% TREO.

Dr Louis Schurmann said: “The Jongju Target* would appear to be the World’s largest known REE occurrence.”

Technical information in this announcement has been compiled by Dr Louis W. Schurmann, who is a Fellow of the Australasian Institute of Mining and Metallurgy and a Professional Natural Scientist with over 18 years of experience relevant to the styles and types of rare earth mineral deposits under consideration, and to the activities which has been undertaken to qualify as a Competent Person as defined by the Australasian Code for Reporting of Minerals Resources and Reserves (JORC) 2004. Dr Schurmann consents to the inclusion of information in this publication.

Further exploration is planned to recommence in March 2014, which will include 96,000m (Phase 1) and 120,000m (Phase 2) of core drilling. Results from the exploration program will be reported according to the Joint Ore Reserves Committee of The Australasian Institute of Mining and Metallurgy, Australian Institute of Geoscientists and Mineral Council of Australia (JORC Code (2004 / 2012)).

Investigations by the DPRK’s Academy of Science geologists have also identified several HREE targets*. There are also seven newly discovered carbonatite complexes which have been identified as green-field exploration targets. Exploration programs have been planned to assess their potential in 2014, together with the evaluation of known bastnasite and monazite deposits.

According to the mentioned HDR Salva Resources’ assessment, the Jongju REE Target* also contains economical quantities of rare and critical metals associated with fluorite, apatite, zircon, magnetite, ilmenite, nepheline and feldspar. These commodities will also be addressed during future exploration and further studies.
“This joint venture agreement reinforces the strong and constructive relationship SRE has developed with the DPRK over that time,” he said.

“The REE resource potential of the DPRK, while estimated to be massive has only been lightly explored to date. Given the major economic significance of the effective utilisation of these important minerals to the DPRK, we look forward to working in close co-operation with our partner to progress the development of this excellent opportunity.”

In terms of back ground, the majority of rare earth elements were sourced from placer deposits in India and Brazil in 1948. During the 1950’s, supply came mainly from South Africa, mined from large veins of rare earth-bearing monazite. Then from the 1960’s to 1980’s, rare earths were supplied primarily from the U.S., predominantly from Mountain Pass in California. Competition from China and environmental concerns eventually saw the U.S. operations shut down, and for the last 15 years China has dominated global supply. China today supplies an estimated 90-95% of the global market.

China has recently set quotas to restrict its rare earth exports, and global suppliers have made considerable headway in reducing dependence on Chinese supply. Based on this, several major rare earth companies have been taking advantage of this situation while many junior exploration companies have embarked on exploration programs to add value to small and relatively low-grade REE occurrences.

References to Exploration Target(s)* or Target(s)* in this document are in accordance with the guidelines of the JORC Code (2004). As such it is important to note that in relation to reported Exploration Targets or Target any reference to quality and quantity are conceptual in nature. Exploration carried out to date is insufficient to be able to estimate and report rare-earth mineral resources in accordance with the JORC Code (2004). It is uncertain if further exploration will result in the determination of a rare earth mineral Resource.

Further information will be available at www.pcreml.com and www.sreminerals.com

To subscribe to Mining Weekly’s print magazine email subscriptions@creamermedia.co.za or buy now





Wihwado benefits China second time but leaves Korea divided

19 06 2012

 (Leonid Petrov, The University of Sydney) Last week, North Korea announced to the world that it would make its two islands, Hwanggumphyong and Wihwado, a visa-free zone for foreigners. A special law has been adopted in the DPRK to attract foreign investors and give them preferential treatment in the payment of tariffs, taxes and land use. Will this recent change in policy rescue the North from poverty and change things for the better?

Those who are familiar with Korean history will remember the Wihwado Retreat (위화도 회군) of the 14th century. In 1388, General Yi Seonggye of the Koryo kingdom was ordered to march north with his army and invade the Liaodong peninsula, which was under the control of Ming China. However, when his troops reached Wihwado Island in the estuary of the Amnok (Yalu) River, General Yi suddenly changed his mind. With the support of high-ranking government officials and the army, Yi Seonggye decided to return to the capital, Kaesŏng, and trigger a coup d’état. He toppled the Koryo King and ascended the throne himself as King Taejo, the founder of Joseon Dynasty.

King Taejo’s change of heart comes to mind in the context of the situation. In an effort to turn the tide of its economic development, North Korea selected the islands of Wihwado and Hwanggumphyong as the future site of the country’s Special Economic Zone with China. Although the move goes against the grain of North Korea’s traditional tendency to isolate itself, the islands lie at the mouth of the Amnok River, which has served as a natural border between the two countries since the time of Yi Seong-gye. Its location, just opposite the cities of Sinuiju on the DPRK side and Dandong on the PRC side, adds strategic importance to this historic place. In June 2011, a start-up ceremony took place on the island in recognition of the DPRK-China joint development and operation project.

The executive decision to develop the abandoned islands into a thriving industrial park had been made by the North Korean leader Kim Jong-Il who frequently visited China to solicit economic aid and investment. Soon after his demise in December 2011, his son and successor, Kim Jong-Un, called upon the citizens of the DPRK “to actively do business with China” and “bring in as much cash profit as possible”. As such, the commercial importance of Wihwado and Hwanggumphyong Economic Zone has only increased, raising speculations that it would be turned into the playground of capitalism for North Korea’s centrally-planned and autarkic economy.

The earlier experience of joint development and cooperation in the Rason (Rajin-Seonbong) Economic and Trade Zone showed that neighbouring China was keen on aggressively investing in infrastructure and manufacturing sectors provided they could be guaranteed an upper hand in competition against Russian, Japanese or South Korean investors. China’s access to the East Sea (Sea of Japan) is cut short by the 17 kilometre-long DPRK-Russian border, rendering the industrial base of Jilin and Heilongjing landlocked. On the contrary, the Wihwado and Hwanggumphyong Economic Zone, located at the mouth of the Yalu (Amnok) River, which flows into the Yellow (East) Sea, seems to be a more attractive option for China.

Beijing has once thwarted North Korea’s plans to set up a Special Economic Zone in Sinuiju, where Pyongyang intended to create a new Hong Kong or Macao. The Chinese billionaire, Yang Bin, was appointed by Kim Jong-il as the governor of Sinuiju Special Administrative Region in 2002. That same year the DPRK government enacted a new economic policy on wage and pricing systems based on self-accounting management, known as the “July 1 Measures”. To the North’s dismay, China was not impressed by the prospects of having another Hong Kong on its northeastern frontier and quickly arrested Yang Bin for tax evasion. The message was clear: any development close to China’s borders must be endorsed by Bejing.

This time, Hwanggumphyong and Wihwado Economic Zone is the product of a Sino-North Korean administrative and trade agreement. Even the recent announcement that foreigners would be granted visa-free access and enjoy tax breaks still manages to provide China with full control over the movement of people and capital within its territory. Pyongyang’s official news agency, KCNA reported that, “upon presentation of passports or other equivalent documentation, foreigners and vehicles may enter or leave the zone through the designated route without a visa.” It also promised that “customs duties will not be levied on materials brought into the zone for processing, or on finished goods.” China’s control of the surrounding geography means that Chinese investors and manufacturers will have an upper hand in trade.

North Korea is in no position to bargain. Pyongyang’s dependence on Beijing is growing as international sanctions over its nuclear and missile programmes make it increasingly difficult for the North to access international markets and credit. The impoverished country is striving to revitalise its economy through foreign investment in its economic zones. Since China has already invested about US$3 billion in developing port facilities and roads in the Rason Economic and Trade Zone, Beijing might decide to funnel significant capital to the Hwanggumphyong and Wihwado Economic Zone too. But will this contemporary “Wihwado Retreat” rescue the North Korean economy?

Beijing would love to see Pyongyang follow its example by introducing market-oriented reforms, but North Korea simply cannot come to terms with granting its population the many freedoms necessary to make such a reform successful. Even the Chinese-style reform of the late 1970s required some basic liberties (freedom of movement, information, association, etc.). This is simply impossible in the conditions of an ongoing Korean War, in which North Korean society is continuously fed lies by the regime and inherently fears interaction with the rest of the world, particularly, South Korea. If Pyongyang decides to initiate reform, Chinese-style or otherwise, it would inevitably and quickly lead to the collapse of DPRK’s political regime. Therefore, the very word “reform” is a taboo in North Korea.

The DPRK leadership genuinely wants to modernise the country’s economy but does not want to change its social and political life. Pyongyang is constantly searching for shortcuts that could boost its dysfunctional economy without having to conduct a systemic reform. The new North Korean leader, despite of his young age, is surrounded by conservative older family members and elites who have no visionary plan for developing the country. Setting up tiny special economic zones, which would generate foreign exchange without bringing about any change to the rest of the country, is a preferable way forward. As a result of this half-hearted policy, the ordinary North Koreans will eat and dress better; they might even own PCs and mobile phones, but they will continue to live in the same paranoid state of fear and dependency on the Great Leader’s decisions.

The visa-free regime and tax holidays, which are promised for the Wihwado and Hwanggumphyong Economic Zone, are simply measures to lure a handful of random foreign investors and should not be seen as a sign of change in the economic thinking of Kim Jong-Un. Neither reform nor economic liberalisation is on the cards because either of these would immediately jeopardise domestic stability. The zones of economic cooperation are reluctantly permitted by the North Koreans with apprehension that possible ideological contamination might cost more to the regime than economic benefit.

Given the circumstances of the ongoing inter-Korean conflict, the sustainable development of the North Korean economy is impossible. The regime is locked in a security dilemma and is reluctant to experiment. Only peaceful co-existence and economic collaboration between Seoul and Pyongyang would remove fears and re-build trust. Increased inter-Korean cooperation, where the plentiful resources of the North are complemented by the cutting-edge technologies from the South, is capable of bringing North Korea back from its prolonged socio-economic crisis. Such collaboration would also enhance the powerhouse of South Korea, opening new markets beyond the Military Demarcation Line and linking the trans-Korean railway to the Eurasian continent.

This article can be read in Korean here… 위화도. 황금평 경제개발이 주는 의미는?

This article was also published as “Pyongyang’s newest SEZ just another shortcut” (AsiaTimes On-line, 22 June 2012)





Cyber attacks may spark new war in Korea

8 06 2012

(Leonid Petrov, 38 North, 9 July 2013) Those who are familiar with Len Wiseman’s 2007 film “Live Free or Die Hard” (“Die Hard 4.0”) will recall the actor Bruce Willis taking on a gang of cyber terrorists intent on hacking FBI computers. At one point, the arch-villain Gabriel orders a crew of hackers to start a “fire sale” by taking control of the stock market and transportation grids. The attack is designed to target the nation’s reliance on computer controls, sending the public into a panic and presenting us with an almost credible sci-fi plot. The reality of today’s world shows that cyber-terrorism, if left unchecked, might be used not only by individuals or extremist groups, but by hostile governments on the offensive.

The Korean peninsula is now quickly turning into a place where a singular cyber-attack might spark a full-fledged conflict. Last month, North Korea was accused of actively jamming global positioning system (GPS) signals, targeting South Korea’s two largest airports outside its capital city of Seoul. The jamming signals, which were first detected on April 28 and ended on May 6, were traced to the North Korean border city of Kaesong, just 10 km north of the DMZ. Suspicions fell on imported truck-based jamming systems from Russia, capable of jamming signals within 100 kilometres. Was it really North Korea who stood behind the GPS jamming incidents and, if so, what was the purpose?

Following the North’s failed satellite launch on April 13, cyber warfare could be considered by Pyongyang as a more cost-effective way of intimidating the South. North Korea can send out jamming signals over a wide bandwidth, affecting a large number of facilities without consuming excessive amounts of energy or much needed foreign currency. A total of 553 aircraft flying in and out of South Korea’s Incheon and Gimpo airports reported GPS system failures, as did hundreds of ships and fishing boats. Considering the proximity of Seoul to the DMZ and Incheon International Airport’s proximity to the disputed waters of West Sea (Yellow Sea), such activity could cause aircrafts or ships to stray into North Korean territory, which would justify another naval clash.

GPS jamming can be used alone or in combination with other electronic and network-based attacks to disrupt South Korea’s highly digitized society. In addition to its forays into electronic warfare, the North’s military is also reportedly building up its hacking expertise. Within the last 12 months, North Korean military intelligence was accused of conducting a number of cyber attacks against South Korean and US financial institutions, government, and military websites. Experts believe that the DPRK People’s Army has units with hundreds of hackers, many of them based in China, who are employed in psychological operations to spread propaganda and infiltrate social networks. The Reconnaissance General Bureau is usually suspected of being responsible for coordinating these attempts to take down South Korea’s IT and communications infrastructure.

While inter-Korean confrontation is reaching new heights, the arrest of a 56-year-old naturalized citizen of New Zealand in Seoul in June reveals a new trend in an old conflict. An ethnic Korean known as “Mr. Kim” has been accused of exporting a satellite navigation system and long-range rocket detectors, which could have seriously compromised South Korea’s military capability. Kim and his South Korean business partners were arrested after an alleged meeting with a North Korean agent in Dandong, China. In July of last year, Kim also engaged in trade activities in Nampo, North Korea, where he handed over sensitive information that had been requested by a North Korean agent.

To what extent the North Korean military was able to utilize this equipment and information became clearer in early June this year. In an unusually detailed statement, the General Staff of the Korean People’s Army declared an ultimatum to the South Korean president Lee Myung Bak. It claimed that its missile units and other forces had been programmed with the longitude and latitude co-ordinates of various media outlets in Seoul. Among the named targets were the Chosun Ilbo and JoongAng Ilbo newspapers, a TV channel operated by the Dong-A Ilbo newspaper, and the KBS, CBS, MBC, and SBS television stations. In its report, the Korean Central News Agency (KCNA) named specific coordinates of the targets and promised to eliminate them if Lee did not publicly apologize for “hurting the dignity of the supreme leadership of the DPRK.”

According to Martyn Williams, who runs the “North Korea Tech” website, the coordinates given by the KCNA for the Chosun Ilbo and Dong-A Ilbo were incorrect, in that they failed to factor in the simple rule that the maximum value for measuring minutes and seconds is 60. That is, the Chosun Ilbo was listed at 37°56’83″ North and 126°97’65″ East. Even if these calculations were corrected and processed through mapping software, one would end up in the mountains to the northwest of Chuncheon province—a long way from downtown Seoul. The Dong-A-Ilbo’s location was similarly mistaken, as well as the coordinates of JoongAng Ilbo office, which in fact, belonged to a building across the street.

However, it is not only the hi-tech GPS equipment that North Korea might use to cause chaos and panic in South Korea. Some computer experts say that the North could try to destroy infrastructure in South Korea connected with traffic, electricity, power plants, and water supplies by hacking into computer systems. Over the years, the arsenal of North Korean cyber warfare has expanded to include virus-laden computer games. A 39-year-old South Korean game distributor, known as “Mr. Cho,” is now in police custody for allegedly violating the National Security Law when he travelled to Shenyang, China, where he is said to have met with agents of a North Korean trading company.

Cho asked the North Korean programmers to develop game software that would be used in South Korea, purchasing dozens of copies valued at tens of millions of Korean won. He then sold them to South Korean distributers. According to South Korean intelligence officials, these games were infected with malignant viruses, which turned customers’ PCs into “zombie computers,” contributing to the attempted cyber attacks against Incheon International Airport in March 2011. This activity could also provide the North with the personal information of hundreds of thousands of South Korean users of online games.

Unlike the GPS-guided conventional strike, a cyber-attack can be much more precise, long-ranged, and frustrating. North Korea-focused websites run by Pyongyang watchers and academics often fall victim to hacking attempts, which usually take the form of a Distributed Denial of Service attack. DDoS attacks involve surging a server with unwanted requests, creating such demand on the processor that the website itself becomes unavailable. Tad Farrell’s web portal “NK News: DPRK Information Center” suffered several such attacks in the past before being knocked out completely on June 6 by a different type of malicious attack where passwords were changed and most of the data in the server was wiped out.

It happened just two days after a rare photo of Kim Il Sung was published online, revealing the huge cyst on the neck of the former North Korean leader. Talking about this tumor is considered a crime in the North, and the DPRK media still meticulously avoids depicting it. Was this attack initiated by the North Koreans? It is always very difficult to find the culprit of any cyber attack. The North is routinely blamed for masterminding cyber attacks against the unfriendly sites, particularly if they are linked to North Korean defectors or focused on human rights issues. The paranoid nature of the South’s spy agencies and the ongoing inter-Korean conflict tend to elevate such suspicions to the status of common knowledge.

Cyber-attacks occur regularly worldwide and Trojan viruses are relatively easy to code. To organize and sustain a DDoS attack, the hackers must have resources on the scale that could only be provided by a wealthy client or a nation state. With heightening tensions in mind, North Korea would certainly do everything in its power to bolster its intelligence gathering capability along with the ability to attack vulnerable targets. But would not South Korea or China do the same? Even rogue NGOs with sufficient funds and vested interests can be linked to cyber crime.

For example, another news portal that follows North Korea, The Daily NK, reports that it knows the source of the malware infections installed on its website because the same Trojan scripts can be found on Chinese registered domains digtaobao.com and 10086chongzhi.com. These sites have no content and could be used by squads of international hackers. But just because a script is associated with China, does not necessarily answer the question about the origin of the malware code. The reasons behind each attack are much more obvious then the identity of a culprit. In most cases, cyber attacks leave us with circumstantial evidence but never with a smoking gun.

Still, following the most recent incidents, South Korean prosecutors will look even closer at any possible relations between the arrested suspects and North Korea’s jamming of GPS signals and cyber attacks. In a divided Korea, espionage can mean the death penalty. Although no one has been executed in the South for any crime since 1997, the new age of burgeoning information and communication technologies presents new challenges to states and national security. More peoples’ lives become vulnerable to subtle technological manipulations, and even foreign nationals can be easily accused of conspiring with the enemy or targeted by the conflicting sides.

Bruce Willis_die-hard-4The damage from cyber warfare can be serious and its potential consequences are yet to be understood worldwide. A Russian specialist on information security, Eugene Kaspersky, warns: “A cyber weapon can replicate itself and hit a random victim anywhere around the world, no matter how far you are from the conflict zone. After all, the Internet has no borders and an attack may target an identical system, for example power stations, even if they are located in a very different region of the world.” In other words, cyber terrorism opens a new Pandora’s Box of dangers of which the world has not had a chance to witness except from hypothetical scenarios in the Hollywood blockbuster “Die Hard 4.0.”

Peace and security in Korea is becoming increasingly susceptible to cataclysms, which can be triggered by either a malicious intent or human mistake. The non-aggression and non-nuclear agreements, which were signed by Seoul and Pyongyang in the early 1990s, as well as the suspension of mutually hostile propaganda, which was maintained during the years of “Sunshine Policy” (1998-2008), are now null and void. Any provocation—either real or assumed—can be fatal and can lead to the resumption of a full-scale war on the densely populated peninsula.

The Armistice Agreement signed in Korea in 1953 is long over-due for replacement by a firm peace treaty, which would guarantee security and create conditions for peaceful co-existence of the two Korean states. Reconciliation and collaboration between Koreans and their neighbors is necessary to avert the danger of a man-made regional catastrophe. Failing to achieve it quickly, means the whole world might be caught in the virtual crossfire of an unfinished civil war, which began 62 years ago.

Read a shorter version of this article in Korean here…  한반도에서 펼쳐지는 사이버 전쟁?!





Pirates or Hawks: Who Hijacked the Chinese Fishing Boats?

25 05 2012

(Leonid Petrov, The University of Sydney) China often describes its relations with North Korea, its closest regional ally, as intimate but not substantial. For more than half a century, Beijing’s attitude towards the Korean peninsula has revolved around the avoidance of three scenarios: ‘No new war on the Korean peninsula’; ‘No regime change in North Korea’, and ‘No American troops on the Sino-Korean border’. But can the developments of recent weeks shake this strategic alliance tested by time, wars and revolutions?

This year North Korea declared that it has reached its self-professed goal of becoming a strong and affluent state. However, the state of its cross-border trade and cooperation with China indicates otherwise. There are signs that inside North Korea’s closed borders the domestic situation in the DPRK is deteriorating and the regime is using every opportunity to use government agencies to earn the desperately needed cash and goods.

A range of UN sanctions have been imposed on North Korea. In response to two nuclear tests and recent ballistic missile launches, a ban on luxury goods has been imposed on North Korea by the UN Security Council. The country is now hard at work, evading these bans, with the help of China. Almost all imports of luxury goods (cigarettes, cosmetics, cars, watches and computers) go to North Korea via China. The criminalisation of border trade with North Korea is notorious within China, whose government does not officially recognise the contraband goods to qualify as ‘luxury items’. This ambiguity often creates situations replete with potentials for border conflicts between the former communist allies.

One incident unfolded in the Yellow (West) Sea on 8 May 2012, where three Chinese fishing boats, with 29 Chinese fishermen onboard. They were abducted by unidentified and armed North Koreans, who demanded the payment of ransom for their return. The vessels were seized in a traditional Chinese fishing area, about 10 nautical miles from the maritime boundary between the two countries. Seven Chinese boats were initially taken; four were later returned to the port of Dandong in return for ransom. Three Chinese boats remained in the hands of the unnamed North Korean kidnappers for another 13 days.

While these kinds of incidents are common, this one developed in an unusual way. As a rule, Chinese ships owners pay the ransom through private channels. There are many individuals and even companies involved in such cases and, on many occasions, they are well connected to DPRK marine forces. This time, however, the armed hijackers approached the Chinese fishing vessels on a speed boat. They wore blue hats and uniforms and some of them spoke perfect Mandarin. They initially demanded the payment of 400,000 Yuan (AU$65,000) for each boat, but later lowered their request and threatened to ‘dispose’ of the boats if the money was not sent through within a short deadline. The demand was transmitted by satellite phones through the crew members, who were kept in captivity on shore without food and were reportedly subjected to beatings.

The fact that the captors gave the kidnapped sailors the mobile number of an intermediary in the border town of Dandong to discuss how to send the ransom suggests that the captors were international group of pirates. For some ten days the Chinese government worked closely with the North Korean maritime authorities, to ensure the safety of the Chinese citizens. Pyongyang, however, has still not commented on the incident. While the nature of this incident remains unclear, it came after Beijing criticised a recent North Korean rocket launch and expressed concern over another nuclear weapons test planned by Pyongyang. This raises a very serious question: Were the hijackers real pirates or was this in fact all a carefully planned retaliation, by the DPRK government, against China?

The North Korean defectors who are familiar with the chain of command in maritime border protection assert that the three Chinese fishing boats were seized by operatives of DPRK General Bureau of Reconnaissance. They usually use armed speed boats which belong to West Sea Base No. 2 located in Nampo and secretly enter international waters to fulfil special missions. Their speedboats are disguised as mid-size fishing vessels but equipped with four Russian made M-400 engines. The General Bureau maritime bases also conduct infiltration missions against South Korea and exist both in the East and West Sea.

The initial reports of the attack testified that the group of captors was wearing blue uniforms and hats and included several Chinese-speaking people. However, the involvement in this particular incident of Chinese criminals is unlikely. The staff members of General Bureau of Reconnaissance are fluent in Mandarin because they are trained to operate in Chinese waters. For example, the operatives stationed at East Sea Base No.1 are required to speak excellent Japanese.

Could the General Bureau of Reconnaissance suddenly decide upon the capture of Chinese fishing boats simply to earn money? Capturing foreign nationals and their property would inevitably create a diplomatic problem and could not be done without the approval of authorities. Discipline in North Korean military is stern and hierarchy is thoroughly observed. While scheming with the authorities to demand money from the captured Chinese sailors, they must have intended to express discontent at something else. What message did the North Korean authorities want to convey to Beijing?

The moist likely scenario was that the abduction of Chinese fishermen was carefully planned by the new leadership in Pyongyang in retaliation for China’s continuing criticism of the North Korea’s April rocket launch and ongoing preparations for another nuclear test. In addition, Beijing recently permitted a number of North Korean defectors to leave China to seek asylum in South Korea that could not but anger the DPRK leaders who wanted to teach China a lesson.

The timing of the incident (8-21 May) also supports this hypothesis. It coincided with the joint US-ROK aerial exercises Thunder Max, which was held between the 7th and 18th May. While these exercises take place on an annual basis, this year’s activities were of a particularly massive scale. These war games in the skies of south-western Korea not only send a warning message to the DPRK but also to China, serving to further strengthen the security cooperation between Beijing and Pyongyang. Paradoxically, joint US-ROK military exercises equip North Korea with extra leverage over China.

Beijing, however, is refusing to link the dots. So far the Chinese Foreign Ministry is labelling the incident a ‘fisheries case’ and searching for the traces of criminal gangs in Dandong. Clearly, Beijing is trying to soft-pedal the incident and avoid open antagonism with its long-term regional ally. All signs indicate that this incident will not negatively affect the strong political ties between the two countries. In the situation where the Chinese government at all costs prefers to maintain the status quo on the Korean peninsula, such a minor incident will not force Beijing to stop supporting the DPRK, a buffer state which separates its own borders from the US-allied South Korea.

After all, the Cold War in the region is continuing, Northeast Asia remains divided and paranoid, and its main front line still divides the Korean peninsula.

See the Korean version of this text here…  해적이거나 호커스이거나

This article was also published by EAF as “North Korea, China and the abducted Chinese fishing boats”

and by The Korea Herald as “Pirates or hawks: who hijacked Chinese boats?”





Northeast Asia – a Region without Regionalism

20 05 2012

(Leonid Petrov for East Asia Forum, 23 May 2012)

Last week once again demonstrated to the world the sad truth about the inability of Northeast Asian nations to establish good working relations in political and economic spheres. The ambitious plan to build a Free Trade Zone across China, South Korea and Japan was pompously declared, only to stumble over old unresolved issues. The legacies of colonialism, international wars and civil conflicts persist, thwarting any attempts to rebuild trust and achieve multilateral cooperation.

The creation of a network of FTAs between the neighbouring states could serve as a confidence building mechanism toward deepening regional integration in East Asia, but efforts have been lagging. Japan and China have yet to enter talks for a bilateral FTA. South Korea and Japan suspended negotiations for a bilateral FTA in 2004 and have made little progress since. This year Seoul has agreed with Beijing to start negotiations for a bilateral FTA, and the first session took place in Beijing on 14 May.

The trade ministers of South Korea, Japan and China for the first time agreed to launch negotiations for a three-way FTA by the end of this year. South Korean President Lee Myung-bak met in Beijing with Chinese Premier Wen Jiabao and Japanese Prime Minister Yoshihiko Noda for annual summit talks, where they discussed the future of tripartite economic cooperation. The three leaders shared the view that a trilateral FTA would boost trade and investment among the three countries and provide a framework for comprehensive and structural cooperation.

But at the press-conference after the summit, South Korean President Lee looked less enthusiastic than his Chinese and Japanese counterparts. Lee said the trilateral FTA would be meaningful to the countries’ future, but avoided answers regarding the possibility of concluding the FTA negotiations within two years. Also further undermining confidence among the three countries, Chinese President Hu Jintao refused to meet with Japanese Prime Minister Yoshihiko Noda without any explanation. Speculators have suggested Hu’s cancelation may have been triggered by the heated debate on May 13 between Chinese Premier Wen Jiabao and Noda over the sovereignty of the disputed Diaoyu/Senkaku Islands, or Japan’s granting of a visa to Uighur leader Rebiya Kadeer to run the World Uyghur Congress in Tokyo.

The three leaders also discussed the continuing North Korean provocations, but the absence of North Korea in these negotiations was conspicuous. A successful regional FTA could allow products produced in North Korea to be freely sold in South Korea and Japan, helping its flagging economy. Similarly, the lack of consumer goods in North Korea could be rectified by an influx of quality products from South Korea and Japan. But for ideological reasons this opportunity remains closed for North Korea.

It is no coincidence that just days prior to the trilateral summit in Beijing, the President of North Korea’s Presidium of the Supreme People’s Assembly, Kim Yong-nam, went for his first foreign trip since the death of Kim Jong-il. But rather than heading to China, he went to Southeast Asia where he met with the President of Singapore, Tony Tan, and the city-state’s parliamentary leader Michael Palmer. Kim Yong-nam was accompanied by Ri Kwang-gun, who heads the Joint Venture and Investment Commission, and An Jong-su the Minister of Light Industry. Obviously, North Korea is trying to attract foreign investment by offering itself to manufacturers interested in cheap labour, and to boost exports of its own consumer products and minerals. In Singapore the leaders discussed a variety of issues, including the situation on the Korean Peninsula and bilateral relations, but President Tan and Mr Palmer stressed that while Singapore was open to advancing bilateral relations with North Korea, they were constrained by the fact that North Korea remains subject to UN Security Council sanctions.

The following day, Kim Yong-nam flew to Indonesia, where he also drummed up support for foreign investment. Most western multinational companies avoid direct business with North Korea because of US trade embargo. Washington has warned financial institutions in Southeast Asia that they should not do business with North Korea. Banks in Macao and Singapore stopped doing business with North Korea several years ago. Given this backdrop, what is the reaction of Indonesia to such pressure?

Indonesian president Susilo Bambang Yudhoyono called for dialogue to resolve problems on the Korean peninsula, while Foreign Minister Marty Natalegawa suggested that isolating North Korea further was not a constructive solution. When discussing the issue of the controversial rocket-satellite launch, Yudhoyono underlined that misunderstandings should be avoided through dialogue and communication. Kim Yong-nam was assured that there are areas where cooperation is possible. For example, the two leaders resolved to raise bilateral political relations by promoting visits by officials, ministers, managers, and media professionals of the two countries. The media swap deal will allow networks in both North Korea and Indonesia to share content and participate in journalist exchanges.

North Korea is clearly trying to curb its excessive reliance on China by reaching out to other countries in Asia. But how many countries can or will help North Korea integrate successfully? Why should North Korea look for partnerships away from its own region? Would not it be more logical to improve relations with its immediate neighbours, namely South Korea and Japan? Is the US or Russia willing to see the three countries building a genuine free trade platform in the region? The combined population of the three major Asian powers is around 1.5 billion people, with an aggregate GDP of US$15 trillion or 20 per cent of the world total. The establishment of a multilateral FTA would definitely help lay a foundation not only for strong economic partnership, but also for trust, reconciliation, and reliable peace in the region.

But developments over the last week have shown once again that domestic affairs appear to carry more weight for national leaders than regional projects. The disputes of the 20th century continue to affect the hearts and minds of politicians in the two Koreas, China and Japan. And it may take longer than expected before regionalism in Northeast Asia will prevail over political mistrust and economic protectionism.

See the Korean version of this article here…  동북아시아- 지역주의 없는 지역

Also published by The Korea Times (23.05.2012)








Follow

Get every new post delivered to your Inbox.

Join 2,369 other followers