1 Response to Congressional Reports on the North Korean Economy

1. Richardson
   June 7th, 2007 at 1:25 pm

   Now that I’ve had a chance to review the 2007 report more carefully, a few excepts of interesting info.

   From the summary;

   Because of U.S. economic sanctions and lack of normal trade relations status, U.S. imports from North Korea in 2006 were nil, while U.S. exports consisted of $3,000 worth of books and newspapers.

   Someone is taking NK’s word on worker pay, it seems. Pages 11-12;

   The 15 companies operating in Kaesong in 2006 and their products include Living Art (kitchenware), Shinwon (apparel), SJ Tech (semiconductor component containers), Samduk Trading (footwear), Hosan Ace (fan coils), Magic Micro (lamp assemblies for LCD monitors), Daewha Fuel Pump (automobile parts), Taesung Industrial (cosmetics containers), Bucheon Industrial (wire harness), Munchang Co. (apparel), Romanson (watches, jewelry), JY Solutec (automobile components and molds), TS Precision Machinery (semiconductor mold components), JCCOM (communication components), and Yongin Electronics (transformers, coils).31 In 2006, the KIC produced some $7.5 million worth of goods each month.

   [...]

   Other issues raised by the K.C. have been the conditions for North Korean workers, whether they are being exploited,35 as well as the hard currency funds the industrial complex provides for the ruling regime in Pyongyang. South Korean officials, as well as other analysts, point out that average wages and working conditions at Kaesong are far better than those in the rest of North Korea. The monthly minimum wage is $50 ($57.50 including the cost of social insurance).
   General workers receive $50, team leaders receive $52-$55, and heads of companies receive $75 per month. After the government, takes its share of the wages, the workers receive about $37 per month. Workers also receive overtime pay.

   Page 22;

   With respect to illegal drug trade, officials from the U.S. military command in Seoul reportedly said that North Korea is earning between $500 million and $1 billion annually from the narcotics trade.

   Page 24;

   U.S. trade with the DPRK is quite limited. The United States does not maintain any diplomatic, consular, or trade relations with North Korea, and the country does not have normal trade relations (most favored nation) status. This means that North Korean exports are subject to the relatively high tariffs existing before World War II in the United States. For example, women’s blouses of wool or cotton carry a 90% import duty if from North Korea but are duty free if from Canada, Israel, or Mexico or are subject to 9 to 10% duty if from most other nations.

   Page 39;

   Current U.S. policy with respect to the DPRK includes (1) diplomatic engagement through the Six-Party Talks; (2) non-proliferation efforts, including the Proliferation Security Initiative; (3) international efforts to counter trafficking by North Korea in illegal drugs, counterfeit currency, or other contraband; (4) maintenance of U.S. military forces in South Korea, Japan, and elsewhere in the Pacific as a credible deterrent against North Korean aggression; (5) economic sanctions and diplomatic isolation; (6) keeping North Korea on the U.S. list of terrorist states; and (7) keeping North Korea from joining international financial institutions.

   Table 11 on page 44, Major Priorities and Bargaining Chips by Country in the Six-Party Talks with North Korea, lists China’s priorities as;

   Non-nuclear Korean peninsula, nonproliferation; continued influence on peninsula, weakening U.S. alliance with Japan and with South Korea

   [...]

   Source: Adapted from: The Seoul Economic Daily, 22 August 2003…

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