Q-MHI Africa Weekly Brief ;

Hi, Q-MHI Africa readers!

COMPLEXIFIER

We often talk in our editorial meetings about answering big questions on African business and innovation. It’s our way of trying to sharpen our focus when covering an economically and politically diverse continent with 55 countries.

To be frank, it helps journalists to know how to answer big, simple questions, because many of our readers are busy and want help in explaining the world—particularly regions and sectors with which they’re less familiar. One typical query we get is, “Where would you invest in Africa right now?”

Of course, there is no simple or straightforward way to answer that question and journalists probably want to avoid seeming to be investment experts. One of the reasons it’s difficult to answer is the metrics which are most relevant vary from investor to investor. In our fast-evolving world even established broad measures like gross domestic product are being challenged, particularly in the African context where the informal market often gets underestimated or overlooked.

From a corporate perspective the ‘where do I invest now’ question is often about where to expand operations and how to navigate past the pitfalls of unfamiliar markets—this is particularly important for African countries keen to attract foreign direct investment. While the World Bank’s Ease of Doing Business indexhas become a useful tool to help manage corporate expectations, a new metric takes a different global approach by grouping countries based on the complexities of their business environments.

The first Global Markets Complexity Index (GMCI), developed by Wilson Peruma, assesses 83 countries across 31 measures of market, operational, and regulatory complexity, and places them into eight country groups with “distinct complexity profiles.”

“One thing we’ve seen is a lot of large companies really struggle as they expand to new geographies so they end up creating more costs risks and not growing the top line as much as they intended,” says Stephen Wilson, whose firm specializes in advising private equity firms and corporates.

So in Group 1 (“MVPs”) they have countries like the United States and Australia, while India, Kenya and South Africa are in Group 6 (“The Builders”) but Nigeria, Zimbabwe, Pakistan and Bangladesh are in Group 8 (“Only the Brave”).

Perhaps unsurprisingly, the sub-Saharan African countries on the list are in the most complex markets, Groups 5 to 8. The key challenge in many of these more complex countries is regulatory say the authors, both having too much and too little regulation in an unpredictable environment vulnerable to corruption and bias.

Though it’s the first edition of the report it already provides additional nuance in helping to answer that question for investors and corporates trying to find their way in less developed markets where size and market potential isn’t as simple as it looks on paper.

— Yinka Adegoke, Q-MHI Africa editor

STORIES FROM THIS WEEK

Nigeria’s delayed presidential elections get underway.

After a one week delay, Nigeria’s presidential elections finally kicked off amid hitches in parts of the country. The decision to delay the vote over logistical problems has had significant impact over the past week disrupting economic activities, even hobbling wedding plans.

But the consensus among observers is it’s become much harder to rig the polls thanks to new technology.

Under the current system, voters show up at polling units and have their PVC verified by card readers before being allowed to vote. The two-step authentication eliminates the dual problems of impersonation and multiple voting—previously rampant rigging tactics. It’s a major shift from the past when only paperwork (which could easily be faked) was enough to allow voters cast a ballot.

“The smart card readers and PVCs were a very important innovation that really enhanced the credibility of the elections,” says Richard Klein, senior adviser for elections at the National Democratic Institute (NDI). As Q-MHI Africa has reported, improvements in making elections more secure have forced politicians to rethink their campaign tactics to reach and convince voters directly.

INEC, which is going through its latest credibility test after delaying the presidential election by a week with a few hours to the polls opening on Feb. 16, has taken steps to protect its current set-up. This includes programming the card readers to work only at specific locations and during specific time frames on election day, which will now be Saturday Feb. 23.

To reduce the likelihood of a hack, the card readers are also programmed to only transmit data without receiving any during the polls. The commission has also proven proactive in solving any card reader-related problems. Eyitemi Egbejule, a cyber-security consultant, who worked on card reader tests as a third party consultant before they debuted in the 2015 election says INEC fixed all identified security issues before the elections. The commission has since upgraded the system ahead of this year’s elections.

Lingering problems

Despite major progress, INEC’s processes remain far from perfect. The commission’s technology could ultimately be undermined by its people if electoral officials abandon the card readers on election day as a result of intimidation by party agents or in a bid to speed up voting, Klein says. It’s a red flag that election observers will keenly watch out for.

The process of collation of results, still done manually, is also a weakness along the value chain and is susceptible to manipulation, Klein adds. There are also transparency concerns under INEC’s current system as it has not yet announced the total number of collected PVCs, despite calls from civic society groups to do so.

But even though the lingering problems remain, Klein, a veteran observer of national polls in Nigeria since 2003, insists elections “are much better today.” As he puts it, the question isn’t so much as to whether Nigeria has a good electoral system, it’s whether the procedures that secure the elections will actually be followed on election day.

CHART OF THE WEEK

Uganda’s social media tax is keeping its citizens offline.

Last year, Uganda’s government introduced a daily tax on 60 websites and social media platforms including popular messaging apps like WhatsApp and Facebook. State data now shows the ad hoc fees, along with levies on mobile money use, led to a decline in internet use along with decreased financial inclusion. Uganda’s social media tax has proved to be detrimental to both its internet and mobile money sectors.

In the three months following the introduction of the levy in July 2018, there was a noted decline in the number of internet users, total revenues collected, as well as mobile money transactions. In a series of tweets, the Uganda Communications Commission noted internet subscription declined by more than 2.5 million users, while the sum of taxpayers from over-the-top (OTT) media services decreased by more than 1.2 million users. The value of mobile money transactions also fell by 4.5 trillion Ugandan shillings ($1.2 million).

“The decline in the amount of business could partly be explained by the introduction of mobile money tax,” the regulator said.

The institution of the fee was first proposed in March last year by president Yoweri Museveni in a bid to curb gossip and increase revenues. Then in July, the East African nation introduced a tax on users accessing 60 websites and social media apps from their phones, including WhatsApp, Twitter, and Facebook.

Critics have criticized the fees, saying it is part of the government’s efforts to limit online expression and puts a burden on economically-strained users. The tax was also introduced following protests againstthe 74-year-old Museveni, who has ruled over Uganda since 1986. Even after online and street protests against the social media tax, officials remained resolute in their decision.

However, Uganda is far from the only African nation raising taxes on mobile internet or money services: Kenya, Zambia, and Zimbabwehave all rolled out similar measures in recent years.

The e-commerce giant has rolled out a service in Kenya which enables customers to buy goods with cash through Western Union. The move is similar to ventures undertaken by Google and Uber in Africa, which prioritize cash over card payments.

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Kenya’s plan to store its citizens’ DNA is facing massive resistance.

The Kenyan government launched a program aimed at collecting the biometric data of its nearly 50-million people, including storing their DNA data.The single population register was initiated by president Uhuru Kenyatta’s administration in a bid to introduce what he called a single “source of truth” on personal identity in Kenya. For years, officials have facilitated the acquisition of citizenship through corrupt means and the government has reiterated the need to create a watertight system, especially in the wake of mounting terror attacks. But critics say the program will have unintended consequences including the denaturalization of millions of Kenyans, opening up the abuse of personal information by state agencies or third parties, and necessitating the surrender of personal information to access constitutionally-guaranteed services, As Abdi Latif Dahirreports.

The secrecy and confusion surrounding the central population register have been criticized by civil libertarians and human rights lawyers,What’s more worrying, human rights lawyer Nasanga Aki says, is that the program was enacted into law without public involvement and through a “miscellaneous amendment” by parliament to the Registration of Persons Act. Such process, she said, is normally used to change minor anomalies and outdated terminologies in statute laws, not to introduce substantive programs like NIIMS. The process of awarding the registration kits was also marred by secrecy, with the tender eventually awarded to French firm Idemia, which supplied Kenya with the biometric voter gadgets that failed during the contentious 2017 polls.

No digital privacy policy

The effort to centralize personal data comes at a time when African governments and activists are clashing over issues including information censorship, surveillance, data retention, and internet shutdowns. The uproar over digital privacy also follows revelations that data mining company Cambridge Analytica harvested millions of Facebook profiles and worked to fix elections in Kenya and Nigeria.

The legal gap of conclusive proof of citizenship has affected many Kenyan communities, including the Makonde, the Shona, along with pastoral communities and tribes living along the border like the Somalis.

Kenya also doesn’t have data privacy laws, and centralizing data increases the chances of breaches and leaks, says the World Wide Web Foundation’s senior policy manager, Nanjira Sambuli. Biometrics and DNA, Sambuli explained via email, are “irrevocable identifiers. In the event this data ends up in the ‘wrong hands’, it’s not something you can correct for as you would change a password.”

Human rights agencies have now sued the government to halt the official roll-out, with interior officials emphasizing DNA material won’t be collected because there isn’t “a bank big enough” to store such information. Nasanga says that doesn’t allay from fears on how far the state will go to collect personal data or abuse it. Sambuli notes there’s also need for a broader discussion around “tech determinism and solutionism” especially with regards to the public sector.If we continue “jumping on every tech bandwagon in the name of offering public services, we risk irreparably breaking societies.”

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Burkina Faso’s influential film festival has survived DVDs and now terrorism.

Held in Ouagadougou, a city that practically exalts African cinema, Fespaco is a truly Pan-African festival that celebrates independent cinema in a struggling industry. Now, even as Burkina Faso faces increasing terrorist attacks, as Lynsey Chutel writes the biennial festival is determined to celebrate 50 years of African cinema.

The festival attracts and awards the best in African film and television and culminates in the  Etalon de Yennenga for best feature film. This year’s finalists include the South African Xhosa western Five Fingers for Marseille; Keteke the Ghanaian film that follows the desperate train journey of a couple who want their child born in the city; and Miraculous Weapons, a film about three women on death row by Cameroonian filmmaker Jean-Pierre Bekolo.

At the last festival in 2017, French-Senegalese director Alain Gomis won for his film Félicité, the story of a lounge singer who does everything in her power to scrape together money to save her son as he lies injured in a Kinshasa hospital. The television selection is dominated by West African series, particularly Francophone, a genre of television overlooked by the increasingly globalized yet Anglophone industry.

Like the protagonists of many of the films, the festival itself has had to survive a gauntlet of challenges over decades. Founded in the optimism of the post-colonial period, the cinema and the film industry struggled, with Thomas Sankara rescuing the Ciné Burkina from near dilapidation in the early 1980s. It has struggled through the digital era, competing against cheap roadside DVDs and VCDs as well as the decline of African art house cinema. In 2017, it faced the very real threat of a terrorist attack, and this year will have to negotiate perceptions of growing insecurity in Burkina Faso.

In 2016, al-Qaeda’s presence in the Sahel spilled into cosmopolitan Burkina Faso with terror attacks on a restaurant and hotel, leaving at least 30 dead. Since then, violence has again come close to the city with increasing frequency of attacks. Last week, the US State Department urged Americans to reconsider traveling to Burkina Faso, while the French Foreign Ministry warned travellers to avoid Burkina Faso, following an attack near the French embassy last year. There is also the ever-present threat of kidnapping.

In 2017, metal detectors and armed guards secured the festival and filmgoers attended with a sense of defiance. It’s unclear what steps will be taken this year in the face of a more dangerous threat as organizers did not respond to request for comment. Still, the program is set to continue in a cultural center that refuses to retreat.

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How two Eritrean brothers built a solar power business in some of Africa’s riskiest markets.

Metkel and Ghirmay have bootstrapped their way across countries including South Sudan, DR Congo and Central African Republic, building a solar power startup that now employs over 50 full time employees. Their dream is to one day soon open their business back home in Eritrea, they tell James Courtright.

Despite the challenges, Ghirmay and Metkel are optimistic about the future. The plan is to be operating in 13 countries by 2025. When asked about working back in Eritrea, both brothers are effusive, “oh yes, that’s a dream.”

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Sudan’s president isn’t going anywhere just yet.

For more than two months now, Sudan has blocked social media access and clamped down on street protests calling for the end of president Omar al-Bashir’s three-decade rule.

But before long, the demonstrations went national and turned against Bashir himself, leading security officials to quell the uprising, disrupt the internet, and arrest opposition figures and journalists. More than 40 people have also been killed in the protests, according to Amnesty International.

Throughout the deadly violence that has engulfed the whole nation, Bashir has remained steadfast even mocking those agitating for change using social media. “Changing the government or presidents cannot be done through WhatsApp or Facebook,” he said in late January. “It can be done only through elections. It’s only the people who decide who will be the president.”

On Friday night (Feb. 23), Bashir responded by instituting a state of emergency and dissolving both central and federal governments in Khartoum, Bashir also dissolved both central and state governments and delayed constitutional amendments that would have allowed him to run for another term of presidency in 2020. Unless the constitution was changed, Bashir, who came to power in a putsch in 1989, would not be permitted to stand again.Ahead of Bashir’s speech, the head of national security and intelligence Salah Gosh told journalists Bashir would step down as the head of the ruling National Congress Party and not run in the 2020 polls—something president Bashir himself didn’t confirm in his own speech. Bashir did, however, say that he would remain the country’s head of state.

The 75-year-old leader also struck a conciliatory note saying the demands and aspiration of his people for better living conditions were legitimate. He also cautioned against “zero-sum politics” saying Sudan should avoid going the direction of neighboring states—possibly hinting at the conflagration of Libya after the ouster and killing of longtime leader Muammar Gaddafi following the 2011 Arab Spring protests.

Bashir also said he had sent “an honest message” to opposition members to participate in constructive dialogue, and said mechanisms will be introduced to engage and empower the youth who are disconnected from the political process. He also said he will listen to the concerns and demand of the young people on the streets who “represent the future of Sudan.”

OTHER THINGS WE LIKED

How foreign aid fuels African media’s payola problem.

In many African countries, a dirty secret of journalism is some reporters earn most of their income from payments by their sources. But what is rarely covered is that the international aid community is among the most prolific payers,writes Prue Clarke for Project Syndicate. Development agencies fork out vast sums to sway African journalists. While outright bribery is rare, insidious payment is rampant. Many schemes – from “transport” refunds that far exceed reporters’ travel costs to exorbitant per diems – come with a tacit understanding that coverage will be positive. Aid groups insist that payments are not inducements; in reality, poorly remunerated journalists cannot easily tell the difference.

For media bosses, bribery rationalizes costs: as long as they publish, sources will foot the bill. Although it is difficult to know for certain what percentage of media budgets derive from unethical payments, in Liberia, where I do most of my work, anecdotal evidence suggests it is a majority of reporters’ pay. For example, two leading media companies told me that they have not paid their staff for at least a year, yet they continue to publish with no noticeable change in output.

The implications of this journalistic business model are profound. For starters, stories are typically poorly written, based on a single source, and inspired by a press conference or press release, rather than a thorough and objective assessment of issues affecting readers. Journalism as a career is also debased, and most top university graduates avoid the profession entirely.

Ironically, aid agencies’ efforts to improve African media have only exacerbated the problem. That’s because today, a typical journalist in Africa is a professional workshop attendee. NGOs from every sector “train” journalists in their subject matter, often with content conceived in Western capitals by people with no experience in journalism or in the target countries. Journalists go from workshop to workshop, turning up long enough to collect their per diemsand write a puff piece.

Some media organizations already recognize this. In Ghana, Joy FM owner Kwasi Twum told me that hepays his staff “enough for a car and a mortgage,” and the station has been widely credited with helping lift the standard of journalism in the country. In the past, Nigerian journalist Dele Olojede lured top graduates in business, medicine, and law to the profession with higher wages and an inspiring mission. In 2011, journalists whom he mentored founded Premium Times, which has earned a reputation as an impartial political watchdog. Liberia’s Front Page Africa has played a similar role, as has the Daily Maverick in South Africa.

To make further progress, African news outlets should emulate their counterparts in advanced economies by developing sustainable revenue streams though e-commerce, subscriptions, sponsored content, supplements, and multimedia. This is where donors can be helpful: rather than host useless trainings, they should enable innovation by pairing African media outlets with experts in business, technology, and advertising. In particular, tech companies should help media organizations take advantage of platform innovations and find opportunities to monetize diaspora audiences.

Donors have already shown that they can pursue development priorities while also making smart investments in media. The Bill & Melinda Gates Foundation, for example, funds health-related reporting at South Africa’s Mail & Guardian and at Premium Times. Aid has also been key to sustaining the organization I lead, New Narratives, which uses funding from governments and foundations to support independent local media. Reporting we supported helped bring about a ban on female genital mutilation and uncovered numerous cases of corruption and mismanagement.

As these and other efforts demonstrate, supporting independent media is among the most important investments donors can make in Africa’s future. But support should never come with strings attached. To build strong communities, Africans need news they can trust. To deliver it, journalists need to come by their funding honestly.

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The door-to-door strategy to mainstream family planning in northern Nigeria.

Over 90% of partnered women in northern Nigeria do not use any form of contraception making the country’s population boom more prominent in the region than anywhere else. But that might be slowing changing as, in The Christian Science Monitor, Ryan Lenora Brown highlights the growing impact of contraceptive saleswomen going door-to-door across the region.

Marie Stopes began the program, called the MS Ladies, in 2009 with a pilot program in Madagascar. In 2015, it expanded into several other countries, and now has more than 730 women working in 15 countries, most of them scattered across Africa. And like the Avon Ladies, or the Tupperware party hostesses of yore, they work on commission, turning a small profit for every contraceptive they provide.

“That makes it more sustainable for us because there are no salary costs,” says Effiom Effiom, the country director for Marie Stopes Nigeria. Instead, Marie Stopes provides the supplies to its saleswomen – all of them trained health professionals – at a steep discount. The cost is about 60 cents for a three-year birth control implant, for instance, and about 8 cents for a monthly supply of pills, so that providers can sell them cheaply to their clients but also still make a bit of cash. And if a customer can’t pay, Marie Stopes does.

Most of the MS Ladies have day jobs as nurses or community health-care workers, so the money isn’t the main reason for their work. Still, it doesn’t hurt.

“Every month, I buy my mother a chicken,” says Rakiyya Adamu, an MS Lady working on the outskirts of Kano, who says she makes between $10 to $20 a month selling birth control. “It’s money I can spend without asking anyone’s permission.”

And for women here, the birth control she sells buys an even greater freedom. Whether or not she gets pregnant, after all, often dictates if a young, newly married woman is able to finish school or not. Space between babies, meanwhile, can allow women to work outside the home, or simply focus on the children they already have.

“I just want a rest for now,” says Sakina Abubakar, a 33-year-old mother of seven boys, with a tinkling laugh that fills her small bedroom. She had her first son at 15, and since then, she has thrown herself headlong into the chaos of raising “my small army.” She wouldn’t change it, she says, but she’d like to hit pause, at least for a while.Behind her, Mrs. Adamu is smoothing a brown tarp onto the floor and laying out rows of sterile steel instruments in neat, glinting rows. She slips off her blue hijab, which is emblazoned with the words CHILD SPACING SAVES LIVES, and balls it up in the corner. Then she motions for Mrs. Abubakar to lie down.

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ICYMI

Boosting West African entrepreneurs. The Young African Leadership Initiative will provide seed capital and mentoring to young businesspeople to innovate and expand their start-ups and business ventures. (Apr. 5)

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Scholarships at Makerere University. The Ugandan university will provide 455 undergraduate scholarships to African students from disadvantaged backgrounds. (May 10)

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Q-MHI Africa 

NK Report

Only at MHI-NK News: Biegun holds second day of talks with N.Korean counterpart in Vietnam: media, By Colin Zwirko   Meetings come as both sides continue preparations for Wednesday’s summit in Hanoi U.S. Special Representative for North Korea Stephen Biegun met his North Korean counterpart in Hanoi on Friday for the second day in a row, as the two sides step up preparations for the second U.S.-DPRK summit next week. North Korean Special Representative for U.S. Affairs of the State Affairs Commission (SAC) Kim Hyok Chol was reported by various media on the scene to have traveled to Biegun’s hotel in Hanoi on Friday morning for the talks. The discussions lasted from around 0900 until 1430 local time, according to South Korea’s Yonhap News Agency, based on reports of the participants’ movements at the Hotel du Parc where the talks were being held. Both sides met again for another two hours of talks in the evening, Yonhap later reported. Thursday’s talks – the first since both parties arrived in Vietnam – lasted around four-and-a-half hours. Kim Hyok Chol was seen on his way to Friday’s meeting with fellow top official Kim Song Hye, head of the department of united front strategy at the United Front Department (UFD), and Choe Kang Il, acting head of the North American department with the foreign ministry. Other North Korean officials in Hanoi to prepare for the summit include Pak Chol and Kim Jong Un’s chief secretary Kim Chang Son. Neither side has released details regarding the precise topics of the marathon talks held Thursday and Friday, though the two sides are believed to be laying the parameters for President Donald Trump and Kim Jong Un’s meetings and perhaps even an agreement expected to result from the February 27-28 summit. A statement from the White House released just before Biegun and Kim met in Hanoi Friday, however, signaled that the U.S. hopes the summit will once again primarily focus on the topic of denuclearization. “This summit aims to make further progress on the commitments the two leaders made in Singapore: transformed relations, a lasting and stable peace, and the complete denuclearization of the Korean Peninsula,” the White House statement read. “The President has made clear that should North Korea follow through on its commitment to complete denuclearization, we will work to ensure there are economic development options,” it continued. The statement did not mention the prospects for sanctions relief as a part of the summit agenda, but did praise the President for mobilizing an “international coalition” to implement “a maximum pressure campaign.” “The President has called on all countries to comply with these sanctions,” it added. Meanwhile, Biegun’s ROK counterpart Lee Do-hoon arrived in Hanoi Friday afternoon and is expected to meet Biegun and possibly others in the lead-up to next Wednesday’s summit. North Korean leader Kim Jong Un, however, as of late Friday still does not appear to have departed his country for the summit by train, despite reports he is expected to arrive in Hanoi on Monday following a roughly 45-hour train journey through China. North Korea committed to dismantling uranium, plutonium facilities: White House, By Hamish Macdonald  U.S. prepared to “mobilize investment, improve infrastructure, enhance food security, and more” North Korea has committed to dismantling its uranium and plutonium processing facilities during prior discussions with the U.S.,  a “fact sheet” published by the White House on Thursday said. While North Korea only agreed to “work towards the denuclearization of the Korean Peninsula” in a declaration signed by Kim Jong Un and President Donald Trump in Singapore in 2018, U.S. officials had previously insisted publicly that additional commitments had been made. The fact sheet, titled “President Trump Is Committed to Achieving Transformational Peace for the United States, the Korean Peninsula, and the World” recapped what it called “historic results” made by the Trump administration in diplomatically engaging North Korea. “North Korea has not conducted a nuclear weapons or missile test in more than 400 days, and has committed to the dismantlement of plutonium and uranium enrichment facilities,” the fact sheet said. While this appears to be the first occasion that the White House has officially stated that North Korea made such a commitment, the State Department’s Special Representative for North Korea Policy Stephen Biegun made the same claim at an event hosted by Stanford University last month. “Chairman Kim also committed, in both the joint statement from the aforementioned Pyongyang summit as well as during the Secretary of State’s October meetings in Pyongyang, to the dismantlement and destruction of North Korea’s plutonium and uranium enrichment facilities,” Biegun said. “This complex of sites that extends beyond Yongbyon represents the totality of North Korea’s plutonium reprocessing and uranium enrichment programs,” he added, though saying that the move was qualified as dependent on corresponding measures by the United States. The Pyongyang summit held between Kim and South Korean President Moon Jae-in in September 2018 produced a joint declaration in which Yongbyon was mentioned, however, no concrete commitment appeared to have been made. “The North expressed its willingness to continue to take additional measures, such as the permanent dismantlement of the nuclear facilities in Yeongbyeon, as the United States takes corresponding measures in accordance with the spirit of the June 12 US-DPRK Joint Statement,” the declaration reads. Though, despite this claim, Biegun also admitted the U.S. and North Korea did not have a shared definition of denuclearization. In addition to the claim, the fact sheet indicates that Trump is planning on offering substantial economic incentives and rewards to North Korea if progress is made on denuclearization. “The President has made clear that should North Korea follow through on its commitment to complete denuclearization, we will work to ensure there are economic development options,” it read. “The United States and partners are prepared to explore how to mobilize investment, improve infrastructure, enhance food security, and more in the DPRK. Robust economic development under Chairman Kim is at the core of President Trump’s vision for a bright future for United States–DPRK relations,” it added. In an effort to promote progress made, however, the White House criticized others administrations for not curtailing the North’s nuclear programme despite offering economic incentives. “Prior to President Trump, efforts to negotiate limits on the DPRK’s nuclear program failed, despite billions of dollars in payment under prior administrations,” it said. The fact sheet was released in the lead up to the second summit between Trump and Kim, which is set to take place in Hanoi, Vietnam on February 27 and 28. Trump withholding information on North Korea, congressmen claim, By Hamish Macdonald Chairmen raise concerns about “disconnect” between intel community and administration on DPRK The chairmen of three U.S. House of Representative committees urged President Donald Trump, in a letter published on Thursday, to stop withholding from Congress information pertaining to North Korea and current negotiations with the DPRK. The letter, signed by Chairman of the House Foreign Affairs Committee Eliot Engel, the Chairman House Armed Services Committee Adam Smith, and the Chairman House Permanent Select Committee on Intelligence Adam Schiff comes just one week before Trump is set to stage a second summit with North Korean leader Kim Jong Un in Hanoi, Vietnam. “It is unacceptable that the administration is planning for a second meeting with Chairman Kim before Congress has been briefed by Secretary Pompeo on the June 2018 Singapore Summit,” the letter read. “There is no legitimate reason for having failed to provide regular, senior-level briefings to the relevant committees of jurisdiction on a matter of such significance to our national security,” it added. The three congressmen requested, in the letter CC’d to Pompeo, that the Secretary of State brief all House members on the outcomes of both summits within one week of the second summit’s conclusion. They further added their deep concern “about the lack of transparency to Congress on intelligence matters related to North Korea” and cited letters sent by the congressmen previously which complained of insufficient congressional notifications from the Office of the Director of National Intelligence. “In our letter – to which we have yet to receive a response – we asked that access to information regarding North Korea’s nuclear and conventional weapons programs be restored for Members and appropriately cleared staff, as had been the case previously,” it said. “On the eve of the second summit, we once again insist that you lift the access restrictions, which severely hamper Congress’s ability to evaluate the threat posed by North Korea,” it added. Additionally, the committee Chairmen raised concerns about perceived differences between the administration’s assessment on the DPRK and that of the intelligence community. “We are perplexed and troubled by the growing disconnect between the Intelligence Community’s assessment and your administration’s statements about Kim Jong Un’s actions, commitments, and intentions,” the letter read. “Furthermore, our ability to conduct oversight of U.S. policy toward North Korea on behalf of the American people has been inappropriately curtailed by your administration’s unwillingness to share information with Congress,” it added. In the letter, the congressmen cited testimony by the Director of National Intelligence Dan Coats as well as separate testimony by the Commander of U.S. Indo-Pacific Command (USINDOPACOM), Admiral Phil Davidson. Coats testified to a U.S. Senate Select Committee on January 29 that the intelligence community assessed North Korea was unlikely to denuclearize and that signs had been observed throughout 2018 that were “inconsistent with full denuclearization”. “We continue to assess that North Korea is unlikely to give up all of its nuclear weapons and production capabilities, even as it seeks to negotiate partial denuclearization steps to obtain key U.S. and international concessions,” Coats said. Davidson echoed this assessment on February 12 in testimony given ay a hearing of the U.S. Senate Committee on Armed Services. “We think it is unlikely that North Korea will give up all of its nuclear weapons or production capabilities, but seeks to negotiate partial denuclearization in exchange for U.S. and international concessions,” Davidson said. “These assessments are alarming for what they indicate about Kim Jong Un’s intentions, and they are also inconsistent with your own statements, including your declaration that North Korea no longer poses a nuclear threat to the United States,” Engel, Smith, and Schiff wrote on Thursday to the President. In addition to Trump and Pompeo, Coats and the Acting Secretary of Defense Patrick Shanahan were also included in the letter. U.S. will maintain sanctions until risk from North Korea “substantially reduced”, By Leo Byrne U.S. Secretary of State Mike Pompeo indicates potentially softer stance on sanctions U.S. Secretary of Mike Pompeo on Thursday said sanctions against North Korea would not be lifted until the risk from its weapons programs is “substantially reduced.” Pompeo’s comments come a week before the second summit between DPRK leader Kim Jong Un and U.S. President Donald Trump in Hanoi, Vietnam. “I don’t want to get into the negotiations, what we might give up, what they might give up,” Pompeo said during an interview with NBC today. “But the American people should know we have the toughest economic sanctions that have ever been placed on North Korea, and we won’t release that pressure until such time as we’re confident that we’ve substantially reduced that risk.” The secretary of state’s comments appear to continue a trend of softer messaging on sanctions from high-level staffers in Washington, who previously claimed that there would no sanctions relief until North Korea denuclearized. In September last year, Pompeo clashed with other members of the UN Security Council over sanctions policy, telling the assembled diplomats that there would be no sanctions relief until North Korea’s “full, final, verified denuclearization.” Trump and U.S. National Security Advisor John Bolton have also previously indicated sanctions could be rolled back in exchange for something “meaningful” and “a significant sign of a strategic decision to give up nuclear weapons.” Pompeo also recently said that international restrictions against the DPRK could be relaxed in exchange for a “good outcome”, though also added that Washington would need to “verify” North Korea’s actions. The U.S. Department of State did not elaborate on the apparent difference in messaging. During the NBC interview, Pompeo added that Washington’s goal remained the complete and verifiable denuclearization of North Korea, and that the U.S. would not compromise on it. “(Denuclearization is) what we need to get for the American people. To keep the American people safe, we have to reduce the threat from a nuclear-armed North Korea, and then, in turn, we can work on peace and security on the peninsula and a brighter future for the North Korean people.” Speaking to another media outlet later in the day, Pompeo also denied that Trump was “ratcheting down expectations” on progress with the DPRK, citing a lack of missile and nuclear tests and ongoing meetings with North Korea. “Real progress being made. And now the two leaders – goodness, a week or so from now, the 27th and 28th – will be together on the ground in Hanoi, and I hope we can make real progress, that Chairman Kim will begin to fulfill the commitment he made in June in Singapore of last year to denuclearize his own country,” Pompeo told the Fox Business Network. Why, at the second Kim-Trump summit, optics could matter just as much as outcomes, By Oliver Hotham For two such image-conscious leaders, the photo-ops are just as important as the joint statement A second summit between DPRK leader Kim Jong Un and U.S. President Donald Trump looms. With just days to go until the two leaders meet in Hanoi, DPRK watchers and pundits are scrambling to make predictions about what to expect from the talks and what kind of new relationship might emerge. But beyond talk of sanctions relief, nuclear concessions, and end of war declarations, almost just as important will be the optics of the summit: the photo-ops, the tours of the city, the post-meeting press conferences (should they take place), and, of course, the all-important first handshake. This is especially true for two such image-conscious leaders. President Trump is known for his love of showmanship, with decades of experience in reality TV and advertising selling his love of the over-the-top luxury lifestyle. Kim Jong Un, too, has spent the last few years shoring up his rule through a not-so-subtle domestic propaganda push. In contrast to his reclusive father, Kim the youngest has since he came to power sought to portray himself as a family man with the people’s livelihood in mind, smiling and laughing with officials and expressing regret at past mistakes. Kim has also, since last year, reveled in his new role as an international statesman – with nine summits now under his belt, North Korean propagandists have delighted in producing long documentaries detailing his travels and foreign leaders who have paid tribute to his leadership. All this – as well as both sides’ need to sell the Hanoi summit as a greater success than last year’s Singapore meeting – make optics all-important, experts say. “President Trump is not one to pass up on the opportunity for grandiosity and drama,” says Soo Kim, a former North Korea analyst for the CIA. “Kim will also benefit to burnish his image as a ‘normal,’ peace-embracing leader through this second meeting with Trump.” “We ought to be concerned that whereas Kim will remain unwaveringly focused on his goal, Trump may mistake good theatrics for progress in nuclear talks, slip, and extend a concession to Kim.” CONCRETE STEPS FORWARD? All this talk of diplomatic theater is, of course, anathema to what many experts want from the summit, and speaks to a shallow process in which success is defined not by tangible outcomes but by pithy photo-ops. “We should be cautious that even the smallest, most benign theatrics take away from the gravity of the issue under contention,” warns Soo Kim. “Perhaps this is what both leaders want.” One source with extensive knowledge of North Korean propaganda but who asked not to be named agrees, telling NK News that “optics are more important than outcome, for both sides.” The Trump administration’s goals appear to have shifted in recent months: from last year’s calls for full denuclearization to 2019’s more pragmatic about-face, it’s clear that Washington is increasingly conscious it may have to settle for something less substantial. This, the source says, means that the Trump administration can paint even minor concessions as a diplomatic victory. “As long as Trump can work in some kind of language … that would enable him to say he removed North Korea’s ICBM threat and thanks to him, North Korea is on a path toward becoming a responsible member of the international community by implementing economic reform, I would say Trump would be able to spin the summit as a success,” they say. Pyongyang’s considerations are even less reliant on major progress, the source says, arguing that Pyongyang will be able to paint the second U.S.-DPRK summit as a success “regardless of the actual outcome.” But in many ways, one expert points out, both sides have already declared the meeting a success. “President Trump and Kim have already been crafting a narrative of success in advance of the summit in Hanoi,” says Jung Pak, a senior fellow at the Brookings Institution. “Of course, optics are important. But there’s the risk of President Trump painting himself into a corner, if he hasn’t already, getting more and more invested in the positive optics of summitry rather than substance.” Blame game: What’s causing so many delays on inter-Korean projects? By Chad O’Carroll and Dagyum Ji Confusion on how to interpret UNSC sanctions may be at root of recent issues While hundreds of trucks and tourists flow across the China-DPRK border unhindered every day, the road of inter-Korean exchange has faced some surprising bumps and barriers in 2019 best illustrated by two key recent examples. Firstly, what should have been a straightforward January delivery of Tamiflu medication to help North Koreans through the freezing Winter season remains stuck in South Korea. This is despite the fact that humanitarian exemptions have long existed within the North Korea sanctions regime to facilitate such deliveries. Secondly, South Korean Journalists reporting on a belated New Years event in the North Korean resort of Mount Kumgang were – in February – barred from bringing cameras and laptops across the inter-Korean border. This is despite a likely established precedence, as it would have been hard to imagine reporters covering the demolition of the Punggye-ri nuclear site without laptops and cameras in 2018. So what exactly is going on and why are these seemingly mundane issues causing such problems now? Not only is the matter complicated, but the answers also depend on who you ask. And though these obstacles have received little press attention outside of South Korea, they’re fundamental for understanding a dynamic fraught with confusion and one which could create major future problems for inter-Korean cooperation. POINTING THE FINGER In both cases involving the Tamiflu deliveries and equipment in possession of the journalists, South Korean citizens and cargoes would have to cross the Military Demarcation Line (MDL) separating the two Koreas. This, consequently, has unique implications which do not exist on North Korea’s borders with either China or Russia, namely that a third party also plays a role in determining what can cross the border: the United Nations Command (UNC). How, then, is a decision made as to whether or not an activity, person or cargo going to North Korea over the MDL breaches UN sanctions? “When South Korean nationals visit North Korea, relevant divisions within the Ministry of Unification approve the inbound and outbound of items according to the Inter-Korean Exchange and Cooperation Act,” an MOU spokesperson told NK News. The ministry then “examines whether there are items that are subject to the international sanctions including that of the United Nations”. But the process doesn’t stop there when the items cross the MDL as the U.S.-led UNC also has authority over the area and requires additional sanctions verification processes. “We will check with United Nations Command folks and their Secretariat,” a spokesperson for U.S. Forces Korea / UNC told NK News. “They receive the official requests to cross, process and are involved.” As a result, close coordination between the U.S. and ROK is logically required for many inter-Korean activities, and that’s precisely where issues have recently come to the fore. On Tamiflu, question marks on what, exactly, South Korean authorities were intending to send along with the medicine appear to be at the core of the problem. The MOU said on January 8 that Seoul had approved a bill to provide Tamiflu to North Korea and that it planned to deliver the goods “in the near future” after consultation with Pyongyang. The decision was finalized less than three weeks after the Trump administration reportedly gave a green light for South Korea to provide the Tamiflu at the second face-to-face meeting of the ROK-U.S. working group on December 21. But less than two days later the MOU said the delivery of 200,000 doses of the medicine and 50,000 sets of early medical detection kits – which would have required UNC authorization to cross the MDL – would be “delayed a little”. With the issue is still unresolved, the MOU on January 25 said that plans had been postponed further due to an “issue of technology and practical preparation,” prompting South Korean media to speculate that problems with the UNC – which last August controversially blocked an inter-Korean rail survey – may have been causing the delay. Shinzo Abe’s legacy building in the age of the new-look North Korea, By Marco Milani and Markus Bell Japan’s Prime Minister faces dilemma over domestic agenda and changes on Korean Peninsula Japanese Prime Minister Shinzo Abe survived a 2018 marked by scandal, corruption and political isolation to win re-election as leader of Japan’s Liberal Democratic Party. With the stage set for Abe to lead the country until 2021, he stands to become the longest-serving Prime Minister in Japanese history. Secure in the knowledge that he will not have to contest future elections, Abe now looks to shaping his political legacy. Domestically, the Japanese leader is well positioned to achieve his long-prized goal of reforming the Japanese Constitution, aimed at the re-appropriation of the military as an instrument of foreign policy. But succeeding at home requires Abe succeed overseas. An ongoing U.S.-China trade war and deteriorating relations with South Korea means that Abe is going to have his hands full. At the top of the list of his 2019 foreign policy priorities will surely be North Korea. Fire, fury, and missed opportunities 2017 was the year of ‘fire and fury’ and Japan was well positioned to benefit from the rhetorical and security escalations in East Asia. North Korean missile launches and nuclear tests provided a means for consolidating domestic support for his proposed constitutional revision of Article 9, to make Japan a ‘normal’ country again. As the U.S. and North Korea traded barbs, Abe rushed to support the Trump administration’s hard-line approach. But the winds changed in the year that followed, and North Korean leader Kim Jong Un went from bond villain to international statesman. North Korea’s participation in the PyeongChang Winter Olympics, three meetings with Chinese President Xi Jinping, a further three with South Korean leader Moon Jae-in, and a much feted Trump-Kim summit gave hope for shifting the discourse on East Asia from impending war to peace and reconciliation. Japan has not been party to the historic meetings. Conspicuous in its absence, Tokyo has been diplomatically isolated, confounded by what analysts have labelled ‘Japan’s North Korea dilemma’. In short, Abe has refused to engage with North Korea until Kim Jong Un resolves North Korea’s 1970s abductions of Japanese citizens. If Japan’s Prime Minister stands fast on this issue, he risks missing the chance to participate in reshaping the geo-political landscape of East Asia. But if he changes tact, he puts himself at the mercy of a capricious North Korea. If Tokyo and Pyongyang are to restart a dialogue, Abe needs to navigate deeply entrenched animosities between the two countries, a lack of a coherent strategy towards North Korea, and the realization that Japan has little to offer Pyongyang, short of a normalization of relations. He risks wasting significant political capital in a diplomatic volley that could alienate his voter base. History shaping foreign policy 2018 may have been the year of a smiling Kim Jong Un, but not everyone has been convinced by the new-look North Korea. Citing a history of duplicity, Japan is reticent to join the international community in lauding a mainstream North Korea. Japan’s refusal to soften its stance has been matched by claims in North Korean state media that Japan is “Trying to free-ride on the winds of peace”. Inter-state frictions between Japan and North Korea have their roots in two unsettled events: Japan’s imperial expansion and North Korea’s abduction project. Japan and South Korea normalized diplomatic relations with the 1965 Treaty on Basic Relations, which also addressed the damages of Japan’s (1910-1945) colonization of the Korean Peninsula. There have been no such reparations and normalization of relations between North Korea and Japan. Instead, memories of colonization are fresh in the minds of North Koreans, deployed by the government to justify its hostility towards outside powers and used to keep its citizenry on a war-ready footing. Anti-Japanese sentiment in North Korea is mirrored in Japan. Hate speech groups react to North Korean provocations by attacking the country’s ethnic Korean community. In 2002, for example, Pyongyang’s admission that North Korean agents had kidnapped Japanese citizens galvanized Japanese conservatives and contributed to propelling Abe into power. Buoyed by the electoral benefits of anti-Korean feelings, Tokyo has been slow to legislate on anti-Korean racism. Recent events have shifted in Kim’s favor. Knowing that it holds all the cards, Pyongyang is unlikely to make things easy on its old foe. This week on the podcast: The messy history of U.S.-North Korea nuclear diplomacy – Ep.58 Amb. Joseph R. DeTrani discusses past agreements with the DPRK — and why they failed With a second U.S.-North Korea summit just a week away and growing speculation among experts that the meeting will lead to a major agreement between the two countries, it’s more important than ever that observers study the past. Ambassador Joseph R. DeTrani was the Special Envoy for Six Party Talks from 2003 to 2006 and the U.S. Representative to the Korea Energy Development Organization (KEDO), as well as former CIA director of East Asia Operations. 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.

Top MHI-NK Stories from around the web: N. Korean, U.S. envoys hold additional talks on summit agenda (Yonhap News) Senior North Korean and U.S. envoys held additional talks in Hanoi on Friday, hours after an American official said that freezing all of Pyongyang’s weapons of mass destruction (WMD) programs will be a priority at next week’s summit. Kim Hyok-chol, Pyongyang’s special representative for Washington, left the Vietnamese government’s guesthouse at around 8:50 a.m. (local time). He was accompanied by two other officials: Kim Song-hye, director of the United Front Department’s tactical office, and Choe Kang-il, acting director-general for the foreign ministry’s North American affairs. Their sedan arrived at Hotel du Parc in downtown Hanoi, where Stephen Biegun, the U.S. envoy for North Korea, is staying, about 10 minutes later. On Thursday, the two sides had about four and a half hours of talks to map out a deal that will be finalized at the meeting between North Korean leader Kim Jong-un and President Donald Trump slated for Feb. 27-28. In Washington, a senior official provided media with some more details of what the U.S. wants. Speaking to reporters in Washington D.C. in a conference call, the Trump administration official said that a priority is to freeze Pyongyang’s nuclear and missile capabilities, while its “ultimate and overriding” goal is the denuclearization of the communist nation. The official also said that developing a “shared understanding of what denuclearization is” and putting together a roadmap for denuclearization will also be key issues. He stressed a full inventory of Pyongyang’s nuclear arsenal would be required, albeit not immediately. “Eventually, we are going to need a full declaration in order to complete the process of denuclearization, though I expect that will come well before the end,” he said.” It’s basically the international standard on how one can go about addressing the issue of elimination of weapons of mass destruction.” He added, “I don’t know if North Korea has made the choice yet to denuclearize, but the reason why we’re engaged in this is because we believe there is a possibility.” The remarks came amid growing concern that Trump might have lowered his expectations on what he could achieve in his controversial top-down approach toward Pyongyang. Some South Korean media have raised the possibility of a “small deal” from the summit that’s intended to freeze Pyongyang’s nuclear program and eliminate its intercontinental ballistic missiles. Conservative news outlets in Seoul voiced worries that the U.S. will ease some sanctions on North Korea without a “final, fully verified denuclearization (FFVD).” Indeed, there’s no common definition of denuclearization. For the U.S., denuclearization means getting rid of the secretive communist nation’s nuclear arsenal. But the North apparently wants mutual disarmament, in which the U.S. would pull down its nuclear umbrella for South Korea, including halts to the deployment of nuclear-powered strategic assets to the peninsula. In a separate television interview in the U.S. capital, Secretary of State Mike Pompeo reiterated that the important task is to reduce military threats to American people. “To keep the American people safe, we have to reduce the threat from a nuclear-armed North Korea, and then in turn we can work on peace and security on the peninsula and a brighter future for the North Korean people,” he told NBC. Amid speculation that South Korea may be sidelined in related negotiations, South Korea’s chief nuclear envoy, Lee Do-hoon, headed to Hanoi on Friday for consultations with Biegun to coordinate a negotiation strategy. Meanwhile, a North Korean team, led by Kim Chang-son, an official at the State Affairs Commission, has been crisscrossing the city apparently to decide the leader’s itinerary, lodging and the summit location. The team is also reportedly in contact with a group of U.S. officials headed by Daniel Walsh, a White House adviser, to fine-tune the details of the leaders’ joint photo-ops and other public appearances, such as the timing of handshakes between Kim and Trump and the angle of cameras. Also to be determined is when and how Kim Jong-un will travel to Hanoi. The relatively young man may reportedly use overland transportation from Pyongyang. He flew to Singapore in June last year, for the first encounter with Trump, on a rented Chinese plane. The Chinese border city of Dandong, a gateway for North Korea’s transport, may be gearing up for the passage of Kim’s special train. “The Zhonglian hotel abruptly decided on Thursday afternoon to stop taking reservations for Saturday and Sunday,” a local source said. “It is not accepting foreigners starting Friday and began to cancel bookings. This could be related to Chairman Kim’s trip.” If Kim chooses a train trip, it would take a few days for him to reach Hanoi, versus several hours by flight. He’s widely expected to arrive in Hanoi on Monday or Tuesday amid the strong possibility that he will meet with Vietnamese leaders ahead of the summit with Trump. Value of Yongbyon nuclear site underestimated: think tank (Korea Herald) Dismantling the Yongbyon Nuclear Complex could be a meaningful step in North Korea’s denuclearization, as it is key to the country’s nuclear weapons program, a South Korean think tank said Thursday. “While the Yongbyong nuclear facility has emerged as a primary target for the first phase of the denuclearization process, there are opinions that denigrate or belittle the value of the possible dismantlement,” said Hong Min, director of the North Korean research division of the Korea Institute for National Unification, during a forum hosted by the state-run think tank in Seoul.“Some 90 percent of nuclear capability is linked to fissile material. Hence, the Yongbyon site, which produces fissile material, has important meaning (to North Korea’s denuclearization),” he said. The Yongbyon complex reportedly has more than 390 buildings and a 5-megawatt electric reactor, a radiochemistry lab, also known as a reprocessing facility, and a nuclear fuel rod production facility. “A notable fact is that the site seems to be the only place capable of producing plutonium and highly enriched uranium at the same time,” Ahn Jin-soo, a former researcher at the Korea Institute of Nuclear Nonproliferation And Control, said at the forum. North Korean leader Kim Jong-un has committed to the dismantlement and destruction of all North Korean plutonium and uranium sites, according to Steven Biegun, US special representative for North Korea, on Jan. 29. Biegun also said the US wants to reach an agreement on expert access and monitoring mechanisms of key sites according to international standards, and ultimately ensure the removal and destruction of stockpiles of fissile material, weapons, missiles, launchers and other weapons of mass destruction. Ahead of the US-North Korea summit next week, critics have expressed concerns that the meeting will only yield a “small deal,” or a low level of denuclearization measures, such as a freeze on Yongbyong’s production in exchange for minor concessions from the US, including the establishment of a liaison office in Pyongyang. Kim had expressed his willingness to accept the “permanent dismantlement” of the plant in exchange for corresponding measures, when he met with South Korean President Moon Jae-in in Pyongyang in September last year. North Korea warns of food crisis before Kim-Trump summit (Al Jazeera) North Korea has warned it is facing a food shortfall of some 1.4 million tonnes this year and has been forced to almost halve rations, blaming high temperatures, drought, floods and the United Nations sanctions, according to a memo by Pyongyang’s mission to the world body. The release of the undated two-page memo, seen by Reuters news agency on Thursday, comes days before a second summit next week in Hanoi, Vietnam, between North Korean leader Kim Jong Un and US President Donald Trump. Washington has been demanding that North Korea give up a nuclear weapons programme that threatens the United States, while Pyongyang has been seeking a lifting of punishing sanctions, a formal end to the 1950-53 Korean War and security guarantees. The 15-member UN Security Council has unanimously boosted sanctions on North Korea since 2006 in a bid to choke off funding for its nuclear and ballistic missile programmes. “The DPRK government calls on international organisations to urgently respond to addressing the food situation,” read the North Korean memo, which the country’s UN mission described as a follow-up to joint assessment with the World Food Programme (WFP) between November 26 and December 7, 2018. The official name for North Korea is the Democratic People’s Republic of Korea (DPRK). There was no immediate comment by WFP. The memo said North Korea’s food production last year was 4.951 million tonnes, 503,000 tonnes down from 2017. The UN confirmed these figures as official government data provided at the end of January and said North Korea’s food production included rice, wheat, potatoes and soybeans. North Korea said it would import 200,000 tonnes of food and produce about 400,000 tonnes of early crops, but that it would still be left with a gap and from January would cut daily rations to 300 grams for each person from 550 grams. UN officials and aid groups in North Korea were consulting the government to “further understand the impact of the food security situation on the most vulnerable people in order to take early action to address their humanitarian needs”, UN spokesman Stephane Dujarric said on Thursday. He said the UN and aid groups were only able to help one-third of six million people estimated to be in need last year due to a lack of funding. A UN appeal for $111m in 2018 was only a quarter funded, Dujarric said. The UN estimates a total of 10.3 million people – almost half the population – are in need and some 41 percent of North Koreans are undernourished, Dujarric said. Along with extreme weather, the North Korean memo also blames the UN sanctions for restricting the delivery of farming materials and hindering fuel supply for the agricultural sector. US Special Representative for North Korea Stephen Biegun said earlier this month Washington had eased rules on humanitarian assistance to North Korea and was working to clear a backlog of UN approvals. North Korea’s Sunam Market site of major investigation into embezzlement by local official(Daily NK) North Korea’s largest permanent market is Chongjin’s Sunam Market, which sprawls over an area exceeding 23,000 square meters, according to the Korea Institute for National Unification. It is now the site of an investigation into the actions of a market manager who has reportedly embezzled thousands of dollars in taxes and fees over the years, North Korean sources reported on February 17. Management committees in North Korea’s markets collect 1,000 to 2,000 KPW in “market fees” each day from merchants in exchange for space to sell their wares. The manager in question, a woman in her 50s, was in charge of collecting these taxes and fees at the market and is suspected of embezzling the funds, which were supposed to go to the state. “A female manager who worked at the market for around 10 years was arrested in mid-January for embezzling market taxes and fees and is currently under investigation,” said a North Hamgyong Province-based source. “The money she stole was in the thousands (of dollars) so locals are all abuzz in amazement at how she pulled it off.” The Center for Strategic and International Studies, a Washington DC-based research institute, reported last year that North Korea generates some 56.8m USD each year from market taxes and fees, with Sunam Market contributing 849,329 USD annually. The market manager supervises the stalls where merchants conduct their business and collects market taxes and fees, making that position highly amenable to bribes. The job is thus seen as highly desirable among government officials. Market managers are frequently the relatives of Chongjin City Party cadres or local People’s Committee officials. The woman in question, however, does not have any relatives who are Party officials. Displaying uncommon abilities, she has reportedly held the position of market manager for the past 10 or so years. “She maintained good relationships with several cadres over the past 10 years and become the managing director of market managers last year,” said a separate source in North Hamgyong Province with knowledge of the case. “Market merchants complained that she unfairly raised the market taxes and fees, but she had remained unscathed until her sudden arrest in mid-January.” The merchants had petitioned the state in regards to her activities, leading to her arrest. They complained in the petition that she had raised the market taxes and fees to rates higher than in other markets, and threatened merchants with removal from the market if they didn’t pay the bribes. The woman reportedly acknowledged during the course of her interrogation that she took some of the market taxes and fees for herself, but denied that she touched any of the funds earmarked for the state. The financial records, however, show inconsistencies between transactions and the number of stalls in the market, serving as proof that she had stolen from the state, according to an additional source in North Hamgyong Province. “The authorities searched for hidden money in her house and found a bag full of 100 (Chinese) yuan bills under the floor of her bathroom,” she said. “It’s not clear how much money was in the bag but it’s likely to be in the tens of thousands of North Korean won.” The authorities say that the woman will face severe punishment due to the extent of her embezzlement. North Korea generally sentences those found guilty of stealing state assets to at least five years and a maximum of 10 years of “reform through labor.” According to the sources, merchants at Sunam Market are hopeful that the woman’s arrest will lead to reduced corruption amongst the managers there. Will the World Bank Come to Pyongyang? (The Peninsula) “The quickest path to multilateral economic assistance for North Korea is probably some sanctions relief agreement tied to denuclearization. It is only after the immediate economic pressures on the country are lifted that the leadership in Pyongyang is likely to contemplate reforms necessary for IMF accession…” Even then, this endeavor will depend on how much Kim Jong-un is willing to denuclearize and whether his concessions are sufficient for the international community. If Malpass is confirmed by the World Bank’s Board of Executive Directors, he will join a chorus of leaders encouraging Kim to embark on a new path to transform North Korea’s economy. But Kim’s choices are ultimately constrained by security realities and how much confidence he has in Donald Trump’s process.