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NORTH KOREA NEWSLETTER NO. 225 (August 30, 2012)

Ex-chef for Kim Jong-un to Revisit North Korea in September

TOKYO (Yonhap) -- A Japanese chef who escaped from North Korea a decade ago after serving a young Kim Jong-un will revisit the country in September, he said on Aug. 23, after a prior return trip to the North earlier August.

   The 65-year-old man, who uses the assumed name of Fujimoto Kenji for security reasons, flew to Pyongyang on July 21 via Beijing and met North Korean leader Kim during his two-week trip. It was the chef's first visit to the North since he fled the country in 2001 while under suspicion of espionage.

   Appearing on the Japanese commercial TV station TBS on Aug. 23, Kenji said he will fly to North Korea once more in September.

   News reports said that during his recent visit, Kim gave Kenji permission to travel freely between Japan and North Korea.

   TBS said the unusual travel permission granted the chef shows the North's intention to set a favorable tone for North-Japan relations ahead of the 10th anniversary of a landmark North-Japan summit on Sept. 17.

   It also seems to aim at promoting an open-minded image for the new leader, the television station said.

   In his TBS appearance on Aug. 22, Kenji said Kim threw a welcome party for him in Pyongyang, then displayed color photographs of himself embracing the young leader and shaking hands with Kim's wife, Ri Sol-ju, during the party.

   During their reunion, Kenji told Kim, "Comrade general, the traitor has come back," and Kim responded "No no, I forget about the betrayal," the Japanese chef said in the Aug. 23 TV appearance.

   He said Kim's younger sister; the fourth and most recent wife of late leader Kim Jong-il, Kim Ok; and Kim's uncle Jang Song-thaek also attended the party.

   Kim's wife Ri reportedly told the chef, "The leader Kim has often talked about Kenji."

   Kenji is known to have been Kim's private sushi chef and companion during Kim's childhood before secretly returning to Japan in 2001. His wife and daughter still live in the North.

   The Japanese chef has said a Korean resident in Japan secretly delivered an invitation from Kim to him in June and a high-ranking North Korean official escorted him from Beijing to Pyongyang for his recent North Korean visit.


Ahn's Side Denies Sending Computer Virus Program to N. Korea

SEOUL (Yonhap) -- AhnLab, South Korea's top computer anti-virus program maker, never provided its V3 product to North Korea, a spokesman for the company's founder Ahn Cheol-soo said on Aug. 23.

   Yoo Min-young told Yonhap News Agency that allegations raised by the Free Youth Coalition, a conservative civic group, have already been clarified.

   Ahn, an entrepreneur-turned-professor who is thought to have presidential ambitions, no longer runs the company but is its founder and was president at the time of the alleged transfer. The current dean of the Graduate School of Convergence Science and Technology at Seoul National University has come under close scrutiny recently, particularly from conservative groups, as it is believed he could become the opposition camp's candidate for the presidential election slated for Dec. 19.

   The coalition claimed earlier this year that the V3 anti-virus program, including critical source codes, was given to Pyongyang in April 2004 without approval from the Ministry of Unification and the National Intelligence Service. Such a move could be illegal as Seoul prohibits the transfer of sensitive products and could translate into a security risk for the country's domestic computer networks that mostly use the V3 to guard against hacking and computer viruses.

   The spokesman was responding to a question from the ruling Saenuri Party's supreme council earlier Aug. 23, when it asked if AhnLab gave the V3 anti-virus program to North Korea before the communist country made a request or after.

   "There is no need to elaborate on the transfer, because contrary to what some people think, the V3 was never sent to North Korea," Ahn's lawyer Keum Tae-sup said.

   He said Ahn sent a press release on July 17 clarifying all allegations raised.

   Company sources, however, said some 10 years ago, there was debate about sending the anti-virus product to the North to reflect the spirit of reconciliation that existed between the two Koreas at the time.

   State prosecutors said they are looking into the matter, although it will be hard to take any kind of legal action as the statute of limitations has passed.


N. Korea's Mineral Resources Potentially Worth $9.7 Trillion

SEOUL (Yonhap) -- The potential value of North Korea's underground mineral resources is estimated at more than 11 quadrillion won (US$9.7 trillion) as of this year, a report by a private think tank showed on Aug. 26.

   The findings are based on the potential value and commercial prices of 18 key minerals in the socialist country, the Seoul-based North Korea Resource Institute (NKRI) said.

   The figure is much higher than a 7 quadrillion won estimate released by state-run Korea Resources Corp. in 2010, which calculated the value of resources based on 2008 market prices.

   "The 4 quadrillion won gap is mainly due to a sharp rise in global prices for raw materials," Choi Kyung-soo, head of the institute said.

   Based on the latest estimates, he said, the value of North Korea's mineral resources is roughly 21 times larger than those of South Korea, which stand at $456.3 billion for this year.

   Choi said the North Korea's abundance can be attributed to its large reserves of iron ore, coal, limestone and magnesite.

   Of all resources checked, South Korea had more rare earth elements than North Korea.


British Ambassador Says N.K. Wants to Learn Economic Development

SEOUL (Yonhap) -- The British ambassador to South Korea on Aug. 26 said he visited North Korea last week and found the socialist state has a keen interest in developing its bleak economy by learning experiences from other countries.

   Scott Wightman said in his blog that he visited the North for five days from Aug. 13 to have meetings with North Korean officials, UN and aid agency representatives, and Pyongyang-based diplomats from other countries.

   "In meetings, there was a strong and consistent focus on the priority being given to economic development," Wightman wrote in his blog. "I was told that North Korea is interested in studying other countries' experience."

   It was the second time for the Seoul-based ambassador to visit the world's most isolated state since going there in November 2009. This trip was arranged by the British embassy in Pyongyang, he said.

   "There's more traffic on the streets, including many more imported vehicles but in absolute terms, traffic is light," Wightman wrote. "Outside Pyongyang, even main roads are incredibly quiet."

   Wightman observed flood damage during his trips to cities north of Pyongyang, noting a lot of bridges had been brought down and river banks had been washed away.

   "To the eye, crop damage seemed relatively limited, but UN agencies should be able to offer a thorough assessment," he said.
Wightman said his visit to the communist state is "at once interesting but sad," noting, "it feels like another world" being in South Korea's capital Seoul, which has "noise, color and energy."

   "However, I was quite encouraged by the discussions on economic development," he added.

   The ambassador's recent trip coincided with a senior North Korean official's talks with Chinese leaders in Beijing, which apparently focused on developing special economic zones along the Chinese border. Jang Song-thaek, the powerful uncle of North Korean leader Kim Jong-un, accompanied some 50 officials on his visit to Beijing for six days earlier this month.


North Korea-Russia Ties Widen to Medical Sector

SEOUL (Yonhap) -- A Russian medical center plans to exchange medical teams with North Korea, a Seoul government agency said on Aug. 27, indicating an expansion of the bilateral political and economic relationship to the medical sector.

   The state-run Korea Trade-Investment Promotion Agency (KOTRA) said Oleg Pak, a Russian with Korean roots who heads the medical center for the Far Eastern Federal University in Vladivostok, recently told the agency about his plan to visit a medical forum in Pyongyang in August.

   He will discuss exchanging medical teams with North Korea's health authorities, KOTRA said.

   Pak also forecast that the expected dispatch of a North Korean medical team to Russia would heighten the countries' ties in the medical sector, KOTRA said.

   Yonsei University Health System, a South Korean medical center affiliated with Yonsei University, is competing with a U.S. college to be selected as the agency to manage a medical center to be completed by December in Vladivostok.

   If the local medical center wins the deal, it could become a breakthrough in South-North medical cooperation by increasing contact with North Korean medical workers sent to the Russian center, KOTRA said.

   The exchange plan was released as North Korea and Russia have made progress in economic cooperation this year.

   In June, Russia reportedly wrote off 90 percent of an $11 billion debt the North owed Russia, while agreeing to invest the remaining 10 percent in a joint economic program.

   They have also embarked on rebuilding a 54-kilometer railway linking the North's northeastern city of Rajin to Russia's border town of Khasan and expect it to be completed by the end of this year.


North Korea Shows Signs of Monetary Reform: Experts

SEOUL (Yonhap) -- North Korea may be preparing monetary reform as a way to fix its moribund economy, analysts said on Aug. 28, citing increasing academic publications and reports in the socialist nation about the need for such reforms.

   Experts say the latest signs seem to be aimed at stabilizing prices and currency value to gear up the economic reform envisioned by Kim Jong-un, a Swiss-educated leader who inherited a centrally-controlled economy in December of last year.

   The Japan-based pro-North Korea newspaper Choson Sinbo recently published a dissertation by an economics professor at Kim Il-sung University, in which he suggested Pyongyang should tighten its reins over the financial sector.

   "By strengthening the state control of the financial sector, (the North) should achieve stable economic growth," wrote Prof. Kim Eun-chol, who teaches at the prestigious university named after North Korea's founder and grandfather of the current leader Kim Jong-un.

   A business magazine based in the North also published a thesis stressing the importance of controlling the money in circulation.

   In the latest edition published on July 30, the magazine carried a research paper that advised the central bank to recollect currencies circulated among North Korean residents "on time" to establish a stable monetary system.

   The reports are in line with the latest changes reported by several media outlets, including wage hikes for workers, easing tight controls over output and letting production units become self-supporting.

   North Korea watchers gave a similar assessment about the socialist state's latest move.

   "North Korea is reinforcing the status of its central bank, while working on weakening the power of banks controlled by the military and the Workers' Party of (North) Korea," a source familiar with the North told Yonhap News.

   NK Intellectual Solidarity, a Seoul-based defectors' group, last week reported Pyongyang is preparing a new economic organization with finance and accountant experts driven by the Cabinet, from earlier August.

   Pyongyang in 2002 introduced limited reforms but lost momentum three years later, apparently fearful of loosening the regime's grip. Most recently, it unsuccessfully pushed for the redenomination of the currency in 2009, but the botched attempt caused massive inflation and worsened food shortages.


Kim Jong-un's Power Seems Stable, Foreign Minister Says

SEOUL (Yonhap) -- North Korean leader Kim Jong-un appears to be in firm control of the socialist country despite a recent shakeup of its military power structure, Seoul's foreign minister said on Aug. 29.

   The new leader Kim, who is believed to be in his late 20s, took the helm of North Korea last December following the death of his father, Kim Jong-il. Since then, he appears to have solidified his grip on power, despite persistent concerns over the regime's stability.

   "The North's former military chief Ri Yong-ho was suddenly dismissed in July, but Kim handled the case without trouble and was given the title of marshal. That indicates he has seized significant parts of power," Foreign Minister Kim Sung-hwan said during a forum in Seoul.

   Ri's dismissal was a surprise move that fueled speculation about a possible power struggle in the socialist regime. Dismissing it, however, the North announced its leader had been given the title of marshal, the highest functioning military rank.

   Speaking about the North Korean economy, the minister said "it remains to be seen" how Pyongyang will push for possible economic reform.

   There have been increasing signs in recent months that North Korea virtually ditched its planned economy system and state rationing to inaugurate freer management policies under the new regime of Kim Jong-un as a way to fix its moribund economy.

   Minister Kim also stressed that the door to inter-Korean dialogue still remains open, particularly with the leadership change in Pyongyang, though both sides have not held contact this year.