Meet Roh Jeong-Ho: Ex-Millionaire, Symbol of a Failed Policy, and Asshole

Chosun Ilbo photo.jpgPlease allow me to introduce Roh Jeong-Ho, ex-millionaire, former role model for the Sunshine Policy, and asshole. How does one achieve such distinction in life? In Roh’s case, this way:

Roh was once touted by the South Korean media as one of the young leaders in his early 30s who were expected to lead the post-unification era when he exported 44 km of barbed-wire fences to Rajin-Sonbong in 1995. North Korea had asked Roh to supply the fences to isolate the area from ordinary North Koreans. In return, the North offered him the use of 33,000 sq. m of land in the free zone for 50 years. [Chosun Ilbo]

Roh was willing to make what we’ll call certain compromises for the greater good of reform and liberalization:

At first, the North threatened to scrap the barbed-wire order, complaining that the deal was revealed to South Korean media. Roh managed to calm the North Koreans, but then they started making new demands. They even told Roh to supply equipment to guards who were posted along the fence, including tazers and high-voltage current generators.

The North Koreans were apparently quite serious about what the New York Times called “barbed-wire capitalism:”

But to let in the air of foreign currency without also letting in the mosquitoes of democracy, North Korea wants to confine capitalism to the Rajin-Sonbong Free Economic and Trade Zone in the isolated northeast corner of the country, near the borders with Russia and China.

A barbed wire fence, electrified in places, separates the 288-square-mile zone from the rest of North Korea. This despite the fact that a brochure prepared by North Korea’s Committee for Promotion of External Economic Cooperation touts that the zone will become ”a crossroad of human transport and traffic.” [N.Y. Times, Sept. 15, 1996]

Although not much else came of the Rajin-Sonbong zone, the North Koreans did put up the fence, at least. Curtis identified it in satellite imagery. What is not stated is how, exactly, one isolates an area from “ordinary North Koreans” if some of them are allowed to live inside the electric fence. Indeed, I recall having read (but cannot currently find) news reports that the indigenous population inside the zone would have been forcibly relocated. North Korea’s failed plans for a similar trade zone at Sinuiju involved the forcible expulsion of “several hundred thousand local residents.”

Whether this monstrous mass relocation actually came to pass, I cannot say, because thankfully, by 2002 the regime’s ambitious plans were generally acknowledged as a failure. It is always so: this is a regime whose ruthlessness is limited only by its incompetence, and its subjects’ best hope is often that the latter will triumph over the former.

I ask you: is there a better living symbol of the Sunshine Policy than Roh Jeong-Ho, the man wanted to get rich — and naturally, do his part to liberalize and open up North Korea — by selling it barbed wire? North Korea got its barbed wire and stiffed Roh (the barbed-wire salesman, not the dead president), who is now bankrupt, bitter, and lacking in any apparent pity for anyone but himself.

“North Korean government workers operate under a bizarre, performance-based system,” Roh said. “Their performance is gauged based on how much they are able to extort from South Korean businesses.” [….]

“If you’re not careful, you could end up losing everything,” he warned. He added that the business prospects are riddled with traps. “We tend to believe that the North Koreans would be accommodating since we are ‘compatriots,’ but that’s a big mistake,” Roh said. “North Korea extends its invitation to South Korean businesses in order to use them as window dressing to attract Chinese and Russian investors.”

As is inevitably the case with investors in North Korea, a fool and his money — in his case, $1.5 million — are soon parted. This may be one of those rare occasions to celebrate a small victory for karmic justice that precedes the afterlife.

It’s hard to figure out the exact status of the Rajin zone today, as North Korea makes a fresh effort to revive it. Some reports in late 2008 suggested that North Korea had evicted some or all of the Chinese companies that originally bought into Rajin. This is a curious thing; after all, the Chinese thought that they’d purchased an exclusive 50-year lease for the port as recently as 2005.

15 Comments

  1. The begging for money in general makes it obvious North Korea’s system is failing. I am still trying to figure out where the other money is coming from for other prestige investments. For instance, who in their right mind will invest in cell phones and resume construction on the dilapidated Ryugyong Hotel? Will Orascom get burned like Roh Jeong-Ho? I am sure they will.

    North Korea is teetering, and has been for a long time. However, something does not seem right, and this says a LOT for a place like the DPRK. I cannot seem to “connect the dots”. Maybe you know something.

  2. Smart post; the Rajin-China question seems always to be the subject of a new rumor, so it’s good to get more hard data. I have no idea on the sourcing for that Dong-A Ilbo story which you cite on 50-year leases by China, as my understanding is that China secured a 10-year lease for one part of the harbor, while Russia has a 50-year lease on two larger parts of the harbor/docks.

    In closing the deal with the DPRK, the Chinese press has been fairly active in reporting on the Rajin front (within limits, as there is, after all, a master narrative of Wen Jiabao’s brilliance [certainly you can acknowledge that he’s both a peerless genius and a man of the people who always plays China’s cards just right] which is underway at the [obligatory Chi-com] congresses in Beijing).

    Which is to say that it seems that rumors are giving way to public agreements, but we’ll see how it goes.

    The Xinhua proclamations on Rajin (in Chinese, from Global Times) are here and here; the Global Times article entitled “Leasing of North Korean Port Arouses Suspicion,” has been translated into English.

    What interests me about the translated story is the extent to which China acknowledges to its public that foreign observers are making this deal out to be an imperialist land grab, but also how getting access to this little North Korean port becomes part of the larger story of China taking back its rightful position as a leading power in a competitive neighborhood.

  3. This would appear to be a repeat of the industrialists who tried to do business with the Nazis in the 1930s and first couple of years of the 1940s – not a reflection on capitalism itself, more the localized amorality of individuals.

    And, of course, the anti-Capitalist Nazis simply sucked all the money into the centre and proceeded to dismember any private enterprise. The DPKR strikes more as gangsters and medieval despots.

  4. I don’t think you should credit this to the sunshine policy. Roh took the barbed wire to North Korea two years before Kim Dae-jung was elected, and from the report it would seem that his endeavors with North Koreans came to an end when KDJ took power: “After two years passed without Roh being able to complete groundwork on his allotted land, the right was revoked.” Sure, those who formulated the policy should have known better from these kind of experiences. Or rather, they must have known it exactly, being aware that the enterprise will be an endless black hole for funds.
    Roh Jeong-ho is a symbol of what it is to make business with North Korea, not just of the sunshine policy. Sure, the merchandise, barbed wire, adds its own irony to the overall picture.

  5. Now you got me interested in this case.

    In April 1995 this Roh Jeong-ho, CEO of barbed wire manufacturer 씨피코 (CP Co???), announced that now that he had finished talks with NK officials about supplying barbed wire to Najin-Sonbong, NK was going to allow visa-free travel to the zone (Seoul Shinmun, April 19, 1995, via KINDS (http://www.kinds.or.kr/).

    This might have been the media disclosure over which NK threatened to scrap the deal.

    Noh not only took barbed wire to North Korea but imported North Korean products to the South, as reported by Chosun Ilbo on Sept 21, 1997. Stuff imported at the time were some basic products of nature such as mushrooms and handicrafts.

    The story becomes a bit more interesting when it turns out that Noh’s main North Korean trading partner was Kim Tok Hong (Kim Deok-hong) of Ryogwang Trade, who defected together with Hwang Jang-yop in 1997. He had traded with Noh’s “CP Co” since the year before (MBC News, Feb 14, 1997).

    In accordance with the Stalinist logic, a traitor has been a traitor from the beginning, and those in association with him cannot escape the guilt either.

  6. What is the source of Don Kirk’s claim the the North was “to expel several hundred thousand local residents”? Was that written as part of the plans or was it something he speculated would be necessary for this to go through?

    I ask because I remember reading about this (I was very hopeful about the prospect of such projects becoming an inadvertent Trojan horse) and wondering what was going to happen to all those people, and I got the impression from other sources that they were (mostly) going to be hermetically sealed off in that zone abutting China, them being largely tainted already by socialism with Chinese characteristics.

    I’m fairly certain that I did not read Don Kirk’s article at the time (I knew him, and his name on the article would have registered), but if I had read about mass expulsions that would have set off alarm bells because I was writing stuff about China doing the same in those days with the Three Gorges dam, from which about a million were forcibly removed.

  7. By the way now that the currency reform has been enacted does anyone know how Orascom is getting paid?

  8. Just the expression of this guy’s face is pretty much a give away of another self righteous idiot, a bit like, dare I say, RP.

    But in the greater scheme of things, it’s good to see that over the past years, ie a few decades, it is quite clear that there is absolutely no honour in doing business with NK. They’ll always try to suck you dry.

    There is a British company called Aminex and in 2004 (5) they reached an agreement with NK to do a bit of oil exploration. Needless to say, all that’s been explored so far is Aminex’s current account, and it doesn’t seem likely they’ll ever get a rig on site.

    But hey, NK , in their own usual way, sold Aminex some very worthless exploration licenses and no doubt, Kim’s cronies were able to have some memorable banquet’s celebrating yet another gullible company eager to believe their ‘charming hosts’.

  9. Alec, when you read an announcement like the below, nearly four years after this post by NK Econwatch, then you know something is not quite right.

    RNS Number : 9271E Aminex PLC 04 January 2010

    North Korea

    An Aminex delegation to Pyongyang at the end of November was warmly received and the Company has been assured that the stalled process of exploring the East Sea is likely to be permitted to restart. A further announcement will be made at the appropriate time.

    —————————————————————————————-

  10. Antti, Your point about the barbed wire sale preceding the Sunshine Policy is a fair one, but I didn’t say that Roh Jeong-Ho was a product of the Sunshine Policy, I said he was a role model for it and a symbol of it. Although Russia and China ended up dominating Rajin-Sonbong, it certainly appears to have been the prototype for Kaesong and Kumgang, the twin pillars of the Sunshine Policy, and the entire self-serving arbeit-macht-frei notion that you can liberalize a country with barbed wire and slave labor. Like Rajin-Sonbong, they were touted as ways to open up North Korea, yet both were cleared of North Korean inhabitants, surrounded with barbed wire, hermetically sealed from the local population, and largely used as cash cows by the regime. All three projects also appear to have failed because of a combination of excessive regime interference in their internal operations, largely because the regime used them to pursue its political goals and had a pathological fear of allowing foreign states to have too much control in these exclaves.

  11. I also meant to say that it was interesting what you dug up about Kim Tok Hong. I suppose after that the North Koreans would have speculated that Roh was a spy, which I suppose is possible.

  12. Kushibo – I was in Beijing when the Shinuiju scheme came (and went) and I recall that the state media of China and possibly North Korea rather straightforwardly reported that 200,000 people would be removed. Not a lot of taboos about that in the Communist world. (Although China seems wary of repeating the Three Gorges fisaco)

  13. Thanks for the input, slim. I’m not entirely incredulous, I’m just hoping for a direct source, preferably a contemporary one. Having had my own words distorted in public media far beyond what was said or intended, I’m always a little suspicious of the recollections of repetitions of reconstituted information. 🙂

    Case in point, you are saying “200,000” (a bit more than half the population) but Don Kirk said at the same time, “from which the North is to expel several hundred thousand local residents while opening it to foreigners” (essentially the entire population). Shinuiju’s population was officially 352,000 in 2006.

    So his suggestion seems to be that everyone (or almost everyone) would be expelled, while if you’re recollection is correct, then it would seem half are being removed. But even then, were they being expelled or relocated. Were the plans to clear people out of the way of new industrial parks or to clear them out of the region altogether? This is why I’d prefer to see another source.

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