NK Report

Only at MHI-NK News: North Korea will continue “Kaesong model,” not pursue wider reform: Thae Yong-ho, By Dagyum Ji Former high-ranking diplomat says Kim Jong Un will use tourism sector to develop investor trust Pyongyang has an “elaborate plan” to establish 14 special economic zones (SEZs) and will open up its tourism market as a first step to attract investment, former high-ranking North Korean diplomat Thae Yong-ho said on Monday. Thae, who has worked at the National Intelligence Service (NIS)-affiliated Institute for National Security Strategy (INSS), since his defection. Seoul could help set up N. Korean banks post-sanctions: ROK financial regulator, By Colin Zwirko Financial Supervisory Service report argues China could provide a model for DPRK financial reform The ROK government may be able to help North Korea set up new financial institutions during a post-sanctions “unification process,” a recent report by a South Korean financial regulator argued. The Financial Supervisory Service (FSS) report – first released on April 30 – suggests Seoul could assist the North in establishing a development bank. Lawyers, civic groups urge re-investigation of restaurant worker defection case, By Dagyum Ji Minbyun calls for Seoul to apologize to Pyongyang for “criminal act” A group of South Korean lawyers and civic organizations on Monday called for the Moon Jae-in government to re-investigate the controversial case of 12 North Korean restaurant workers who were reported to have defected in 2016. The press conference follows reports by local broadcaster JTBC on Thursday that the 12 North Korean workers. Kim Jong Un understands phased denuclearization ‘failed repeatedly’ – Pompeo, By Chad O’Carroll “Both sides have to be prepared to take truly historic measures to achieve this historic outcome”  It is thought Kim Jong Un understands that phased efforts towards denuclearization “failed repeatedly,” U.S. Secretary of State Mike Pompeo said in an interview with Fox News Sunday, citing Pyongyang discussions with the North Korean leader last week. The assessment comes despite Kim calling last week for “phased and synchronous measures (towards denuclearization) in a responsible manner” in his second meeting with chinese president Xi Jinping. North Korea to dismantle nuke test site between May 23-5: foreign ministry, By Oliver Hotham The DPRK has also reportedly begun taking “technical measures” to decommission Punggye-ri North Korea will dismantle its Punggye-ri nuclear testing site between the 23rd and 25th of this month, the country’s foreign ministry announced in a statement carried by the Korean Central News Agency (KCNA) on Saturday. The country has also reportedly begun taking “technical measures” to decommission Punggye-ri, and, due to limited space. Why North Korea is pushing back on its human rights record, By Robert E. McCoy Pyongyang could use the issue as a pretext to withdraw from dialogue should things not go its way The upcoming summit between North Korean Leader Kim Jong Un and U.S. President Donald Trump is intended to focus on denuclearization, formally ending the Korean War, improving inter-Korean relations, and establishing a lasting peace on the peninsula. Amid all the optimism, however, it is time for a dash of reality. How Pyongyang and Seoul could, formally, end the Korean War, By David S. Lee A DPRK-ROK peace treaty could be concluded by the end of 2018, though would only be a first step The dramatic rapprochement between the two Koreas symbolized in last month’s summit between North Korean leader Kim Jong Un and South Korean President Moon Jae-in has left observers with some mix of hope and caution. The summit’s visual symbolism and emotional rhetoric evoked the desire of a divided nation to be whole. The latest from the podcast: It’s a trap! What past talks with N. Korea have taught us – MHI-NKNews Podcast ep.18 Evans Revere discusses the upcoming U.S-DPRK summit and Kim Jong Un’s end-game Despite what appears to be a promising rapprochement between the two Koreas, North Korea’s scheduled dismantlement of the Punggye-ri nuclear test site, and an upcoming summit between the POTUS and Kim Jong Un, to many this seems like a bad case of déjà vu. So have we been here before, only to emerge with nothing to show for it? In this episode of the North Korea News Podcast, Evans Revere explains why we should be wary of the DPRK’s promises, his experience of past negotiations with Pyongyang, prospects for peace, and what North Korea ultimately hopes to gain from talks. For decades one of the U.S. State Department’s top Asia experts, Evans J.R. Revere is currently senior advisor with the Albright Stonebridge Group, providing strategic advice to clients with a specific focus on North Korea, China and Japan. He is also a Nonresident Senior Fellow at Brookings. He has been working on Asia with a special focus on Korea for 49 years. About the podcast: the “North Korea News Podcast” is a weekly podcast hosted exclusively by MHI-NK News, covering all things DPRK: from news to extended interview with leading experts and analysts in the field and insight from our very own journalists. Listen to the full episode at MHI-NK News

Top MHI-NK Stories from around the web: 2 Koreas expected to hold high-level talks this week: Seoul official (Yonhap News) South Korea and North Korea are expected to hold high-level talks this week to discuss how to take forward the deal reached between their leaders last month, the unification ministry said Monday.Earlier, the ministry said that it proposed holding such a meeting earlier this week and that the North has yet to provide a response. “Consultations between the two Koreas are still under way. It is expected that we will have the meeting this week,” ministry spokesman Baik Tae-hyun told a regular press briefing. The meeting will focus on discussing follow-up measures to the agreements by South Korean President Moon Jae-in and North Korean leader Kim Jong-un during their historic summit held April 27 at the truce village of Panmunjom. Moon and Kim signed a joint declaration in which they agreed to halt all hostile acts against each other, open a joint liaison office in the North’s border city of Kaesong and vowed various economic cooperation efforts. They also agreed to hold a reunion of families divided by the 1950-53 Korean War on the occasion of the Aug. 15 Liberation Day. With regard to controversy sparked by a media report over the 12 North Korean female restaurant workers who defected to the South in 2016, Baik reiterated the government stance that it is closely looking into the relevant issues. The manager and 12 female North Korean restaurant workers defected to the South in April 2016. The government has said all of them came here voluntarily, while Pyongyang has called for their repatriation, saying that a Seoul spy lured them to the South. Last week, a local cable TV network aired an interview with the restaurant manager, who said that he threatened other employees to come with him to the South at the instruction of Seoul’s spy agency. North Korea invites foreign journalists for on-site coverage of nuclear test site closure (Arirang) The invitation is going out only to reporters from five countries — South Korea, the United States, the United Kingdom, China and Russia — due to the test site’s relatively small size. In 2008, when the North destroyed a cooling tower for a nuclear reactor in Yongbyon, the regime invited one broadcaster each from Seoul, Washington, Tokyo and Beijing but it remains to be seen what will happen this time. The regime will provide the foreign press with accommodation, chartered flights from Beijing to North Korea’s eastern city of Wonsan, and special trains to move them from Wonsan to the test site.”Considering the site is located in a deep mountain valley, we will provide accommodation and lay on special chartered trains for the international journalists.”A press center is also to be set up so journalists can file reports — meaning, the dismantlement process is not likely to be broadcast live, but as recorded footage. However, it’s noteworthy that only five countries are invited, and Japan is excluded. Experts say the exclusion shows the thorny relationship between Pyongyang and Tokyo, surrounding many unresolved issues like the Japanese civilians abducted by the North in the 1970s and ’80s. “All neighboring countries of the Korean peninsula are invited, except Japan. This shows the sour relationship between Pyongyang and Tokyo. Meanwhile, North Korea says explosives will be used to collapse all the tunnels at the Punggye-ri test site, and entry to the site will be completely blocked. The observation facilities, research institutes and guard units will also be removed. However, nuclear experts are to be excluded, such as those from the International Atomic Energy Agency. Some experts say the action could be North Korea’s strategy to minimize exposure of its nuclear capabilities before its summit with the U.S. and any follow-up talks with Washington. Kim Could Make North Korea Samsung’s New Backyard: Shuli Ren (Washington Post) It wouldn’t be hard for North Korea to become the next Vietnam, if only Kim Jong Un loosened up a bit. North Korea today looks remarkably similar to the Southeast Asian nation in 1986, when its Communist neighbor undertook “Doi Moi” reforms to tiptoe toward capitalism. North Korea may have a head start, because it’s richer and more industrialized. Vietnam is now a huge manufacturing hub, boasting an economy that’s six times larger than North Korea’s. Last year, it expanded 6.8 percent, the fastest pace in a decade, thanks in no small part to South Korean firms. Samsung Electronics Co. is Vietnam’s biggest foreign investor, accounting for around one quarter of its total export revenue. North Korea’s economy, by comparison, seems frozen in time. South Korean companies would probably happily relocate, though. The wages they’d have to pay workers are significantly lower, based on salary data from North Korea’s Kaesong Industrial Complex, which was shut by the Park Geun-hye administration in 2016. Crimped by sanctions, Kim is playing the diplomat, pledging an end to the Korean War and agreeing to meet with U.S. President Donald Trump, marking, in Trump’s words, a “ very special moment for world peace.” It could certainly be a defining moment for North Korea. Investment accounts for about 26 percent of Vietnam’s GDP. If Pyongyang could raise offshore inflows, which are practically zero, to even 20 percent of GDP, then its economy could grow at 5 percent, according to Morgan Stanley estimates. Investments from South Korea alone could fill that quota. At 20 percent of North Korea’s $31 billion of GDP in 2016 (the latest figures available), that’s about $6 billion. Samsung has plowed more than $17 billion into Vietnam over the years. Vietnam still paints a prettier picture when it comes to demographics. Around 70 percent of the population is of working age, versus only 44 percent in North Korea. And North Korea’s working age population is expected to peak by 2020, compared with 2040 in Vietnam. Combining the populations of the two Koreas would come to around 80 million. That’s big enough on its own to make the peninsula a self-sufficient production and consumption powerhouse. Sell-side analysts often say that the reduced possibility of a war on the Korean peninsula could close the notorious Kospi discount. The risk premium attributed to South Korean assets is fading. Foreigners have purchased more than $17 billion of the nation’s bonds since January, betting an easing of tensions will usher in a less volatile won. Credit-default swaps insuring government debt against a default are near a five-year low. But South Korean firms are still 30 percent cheaper than their peers in the region, even though chaebol have pulled up their corporate governance socks and improved their return on equity.One can’t blame investors for being wary – Kim isn’t exactly a stabilizing influence. But, if he’s true to his word, fund managers could have a lot of catching up to do. N.Korean Embassy in Singapore mum about N.K.-U.S. summit (Yonhap News) Officials at the North Korean Embassy in Singapore have been tight-lipped since the Southeast Asian city state was chosen as the venue for historic talks between their leader Kim Jong-un and U.S. President Donald Trump last week.On Monday, a crowd of local and foreign journalists gathered in front of the North Korean mission, located in the High Street Centre on North Bridge Road, to ask about the mission’s activities. At around 9:00 a.m., a North Korean official carrying a Kimilsung badge on the left side of his chest showed up on the building’s first floor. Kim Il-sung is the late North Korea founder. “You’ve made a prior appointment? Please visit us after making an appointment in advance via email,” he said when a South Korean journalist approached him. He kept silent only with a little smile flickering on his face when facing a barrage of questions from reporters, such as “Are discussions about summit talks (between North Korea and the United States) going well?” and “Will your ambassador come to the office today?” On the 15th floor, where the embassy is located, the official asked a guard to escort reporters out of the building several times. But the official didn’t comply with the request, simply giving the journalists, especially those from South Korea, a nod. Kim and Trump are scheduled to meet in Singapore on June 12, but a final place for the meeting has yet to be fixed. 40% of North Koreans suffer from malnutrition, says WFP (Korea Times) North Korea still needs continued humanitarian assistance because many mothers and young children there still relied on aid to meet their nutritional needs, UN World Food Program (WFP) chief David Beasley said Friday. At a press briefing in central Seoul Tuesday afternoon,… the World Food Programme’s Executive Director David Beasley told reporters about his team’s impressions of North Korea,… based on their four-day visit to the North last week. His team spent two days in Pyongyang,… meeting key political figures like North Korea’s ceremonial leader Kim Yong-nam,… and spent the other two days visiting villages in the countryside. The WFP chief said he could sense tremendous sense of optimism in the leadership and in the people in one of the most reclusive states in the world,… saying they were granted more access,… and more local cooperation than in past years. He added that although cases of poverty and malnutrition still exist,… he didn’t see cases of starvation,… which he used to witness in the North back in the 1990s. “Going from village to village, we didn’t see starvation. Clearly issues of under/mal nutrition. Very little mechanization. Very few paved roads. This is spring time. I saw men and women out in the fields working very structured, very organized, every inch of land being utilized,… working with oxen, ploughs, shovels, hoes, manual labor and tools.” The WFP head also said he could feel the changing attitudes of North Korean officials and its people,… and their yearnings for new opportunities for growth. “What was pleasing was, there seemed to be genuine desire to be more open and frank and candid discussions. Regarding South Korea’s previous vow to donate some 4-point-5 million dollars of humanitarian assistance to North Korea through the WFP,… the head of the WFP said he doesn’t yet know about the exact timeline of the donation,… and he hopes to continue close consultation with the South Korean government. Meanwhile,… following the WFP chief’s meeting with South Korea’s unification minister Cho Myoung-gyon on Tuesday afternoon,… he is also scheduled to meet South Korea’s foreign minister Kang Kyung-wha on Wednesday,… to discuss humanitarian assistance to North Korea and close mutual consultation on future projects.