a commemorative stone at factory entrances, schools, and other places that have what they would call the privilege of benefiting from the leader’s personal guidance.
The most exemplary workers are honored with the award of a “labor hero” title, while others get other awards and medals. State-run factories, companies, and army units are also given Kim Il Sung medals and Kim Jong Il medals “in the struggle to construct the state,” as the award reads. A small elite of senior party cadres, artists, sportsmen and sportswomen, and scientists who have done extraordinarily great deeds for the country are honored with golden watches carrying the leader’s signature, cars with the leader’s birthday number (216) on the license plate, and sometimes even houses. On a side note, material objects also, such as buildings, tractors, trucks, etc., are “rewarded” with stars and other symbols of recognition when their planned life span has been exceeded.
Everybody in the production line, from regular workers to chief engineers all the way up to senior ideological leaders, held a fervent belief in technology. They believed that it could solve pretty much every problem in their businesses. It’s a myth that has been cherished by all socialist countries—that science and technology can bring about an affluent socialist society—which also has influences in Confucianism. They constantly chattered using trendy acronyms like CNC (computer numerical control, meaning computer-controlled machine tools) and IT (information technology), and terms like “biotech,” implying some level of sophistication.
In 2009, I began hearing choirs sing a propaganda song praising the greatness of CNC machines. It was striking that the North Koreans, otherwise proud of conserving the purity of the Korean language, used even the English expressions CNC and CAD (computer-aided design) and not a Korean euphemism stripped of any foreign tinge. That was because everybody agreed, at least on the surface, that the DPRK did not require social and economic reforms. The fatherland was perfect, but the economy suffered because it didn’t have state-of-the art technologies. They blamed that problem on Western embargoes.
North Korea has the potential to experience a windfall of wealth from natural resources—but the problem is, unfortunately, that it’s not selling metals and minerals systematically. An important cause of this is the lack of electricity and materials, along with the worn-out equipment, antiquated facilities, and poor maintenance. This made even the country’s most important facilities operate at about 30 percent or less of their capacity only in the mid-2000s, according to the assessment of some mining equipment companies I represented in North Korea. The country has impressive deposits of more than 200 different minerals.
North Korea’s magnesite reserves are the world’s second largest after China’s, and magnesite is a particularly valuable mineral because of its importance for industry. It has a wide range of uses such as in insulating material in the electrical industry, as slag in steelmaking furnaces, and even in the preparation of chemicals and fertilizers.
The country’s iron ore mine in Musan, near the Chinese border, is Asia’s largest. Iron is the most commonly used metal, used for construction, including bridges and highways; means of transportation, such as cars, trains, ships, and aircraft; and tools such as machines and knives.
Its tungsten deposits are likely the sixth largest in the world, and North Korea is China’s second-largest coal supplier. While coal is primarily used for producing steam in electric power plants or by the steel industry for coke making, tungsten is used for mining and drilling tools, cutting tools, dies, bearings, and armor-piercing projectiles. In countries like the United States and Germany, tungsten is widely used in the production of cutting tools and wear-resistant materials.
North Korea is also home to substantial deposits of rare earth minerals, which are difficult to find around the globe but are increasingly in demand from growing powers such as China and India. They are particularly valuable because of their omnipotent potential: they’re present in pretty much every piece of consumer electronics, such as computer disc drives, X-ray imaging, flat-screen televisions, iPhones, wind turbines, halogen lights, and precision-guided missiles, to name but a few. The country is also home to an estimated 2,000 tons of gold, 500 billion tons of iron, and 6 billion tons of magnesite, with a total value running into the trillions of U.S. dollars. At least that’s according to a 2009 report titled Current Development Situation of Mineral Resources in North Korea by South Korea’s government-owned KORES Korea Resources Corporation.
North Korea feared losing control of its glamorously valuable natural resources, and as such was reluctant to sell raw materials to neighboring countries. As a result, only a few foreign and North Korean-invested mining joint ventures have been doing the extractions in the last ten years. When I suggested upon my arrival in North Korea to the senior officials in the then-Ministry of Metal and Machinery Industries, which owned the large Musan Iron Ore Mine at the Chinese border, to open it up to Chinese investment and exploitation, the answer was that “it is a part of the Korean heritage which we cannot give away.” Over the following years I witnessed the government turn down a dozen or so foreign requests to invest in mines.
But change is in the air, and North Korea is getting serious about profiting from metals and minerals. The China People’s Daily reported in September 2011:
According to China’s General Administration of Customs, the value of direct exports to China from the DPRK last year was $1.2 billion, a 51 percent increase year-on-year, attributed to China’s robust demand for iron ore, coal, and copper. At present, the DPRK mainly imports grain and oil from China. In 2010, China’s exports to its peninsula neighbor reached $2.3 billion, an increase of 21 percent from a year earlier.
The prospect was unthinkable just a couple of years earlier, but North Koreans are now rolling out the red carpet for Chinese investors. They’re also building manufacturing outposts along the border where China can hire cheap North Korean labor, where dealings are more relaxed than in Kaesong. (More on Kaesong later.)
China is making an effort, too, to develop its desolate northern provinces by taking advantage of cross-border exchanges. These provinces are now booming with factories along with a construction frenzy to build roads and railways that move outside of North Korea, but China supports the construction and maintenance of some roads into North Korea as well.
Some unlikely spots are being developed for joint manufacturing projects. Hwanggumpyong, a farming and military-focused island south of the Chinese border city of Dandong, and Wihwa, a smaller island in the middle of the Yalu River, are due to be turned into hubs for manufacturing, tourism, and logistics. So far, disagreements between the North Koreans and the Chinese have led to delays.
Russia, too, has moved in with construction projects that will give it access to the ice-free North Korean port of Rajin. Moscow’s hope is to export Siberian coal and import Asian goods that it will eventually transport to Western Europe. (Russian Railways operates the world’s second-largest network after that of the U.S., reaching from North Korea’s border well into Western Europe.) Of course, North Korea stands to get significant cuts from the project.
Many South Koreans fear that China is encroaching on North Korea with money, hoping to swallow it up and turn it into a de facto Chinese province. The accusations are unfounded; I just don’t see convincing evidence that the investments—made by individual companies and not the government itself—are part of a political conspiracy driven by common defense interests or a grand geopolitical strategy on the Korean Peninsula.
Trade and investment are bigger priorities for China. That will improve the standard of living of its northeastern provinces, as well as promote stability in its immediate neighborhood. Too much pessimism can block out this sort of objective view, and there’s much to look forward to in China-North Korea relations.
NOTES
1. Data from http://www.country-studies.com/north-korea/agriculture.html.
