North Korea’s food situation: worse, but maybe just back to normal

April 28th, 2016

By Benjamin Katzeff Silberstein

Some days ago, the Food and Agriculture Organization (FAO) sounded the alarm bells on North Korean food production. The drought of last summer, among other factors, has caused North Korea’s food production to drop for the first time since 2010. (Recall that in the past years, both North Korean media outlets and some analysts touted Kim Jong-un’s agricultural reforms — the former claimed that food production was increasing despite the drought. It seems they spoke too soon).

Numbers like this, however, matter little without context. After all, five years is not a very long measurement period. Analysts like Marcus Noland have noted that the years following 2010 were probably exceptionally good. The current downturn might be best contextualized as a return to lower but more normal levels of food production.

How does the latest food production figure look in a larger context? The short answer is: not that bad, even though the downward trend is obviously problematic. Let us take a brief look at North Korean food production figures over the past few years. All following numbers show food production figures in milled cereal equivalent tons:

  • 2008/2009: 3.3
  • 2010/2011: 4.5
  • 2012/2013: 4.9
  • 2013/2014: 5.03
  • 2014/2015: 5.08
  • 2015/2016: 5.06

(Sources for all figures except the 2015/2016 figure can be found here, in a piece I wrote for 38 North late last year. It seems the calculation I made for 2015/2016 was off by 0.01 million tonnes.)

In other words, yes, the latest food production estimate represents a decrease, but it’s not that big. North Korean food production is still far larger than it’s been for most of the 2000s.

It is also interesting to note the striking variation in North Korean government food imports. Marcus Noland and Stephan Haggard wrote in Famine in North Korea that the government downsized food imports as a response to increasing aid flows. Whatever the rationale might be behind the regime’s food import policies, they tend to vary greatly from year to year. In 2012/2013, the country imported almost 400,000 tonnes of cereal. In the mid-2000s, imports were close to one million tonnes, and they dropped to under 300,000 tonnes in 2008/2009.  In 2011/2012, imports climbed to 700,000 tons.

For 2015/2016, FAO projects a gap of need versus production of 684,000 tonnes, but government imports stand at around 300,000 tonnes, a relatively low figure in a historical context. Thus, North Korea is left with an uncovered deficit of 384,000 tonnes. Presumably, this wouldn’t be prohibitively expensive to cover by doubling cereal imports. The economy seems far more healthy today than it was in 2011-2012, and still, it managed to import more than double its planned imports of 2015-2016.

All in all, North Korea’s food production appears to be far from sufficient or stable, but the situation does not appear acute in a historical context. Indeed, one could argue that it’s a matter of policy choices and priorities: the regime could choose to increase imports to offset the decline in production, but its funds are spent elsewhere. And, of course, more efficient agricultural policies overall would make North Korean agriculture and food markets far more resilient to weather variations.

Share

Taedonggang Beer goes on sale in China

April 28th, 2016

According to the Korea Times:

Taedonggang beer, a state-owned North Korean brand, is available in grocery stores in Dandong and Shenyang, China, according to news reports.

“I noticed billboards promoting Taedonggang beer on a street near Dandong Station, and also newspaper advertisements showing the addresses and phone numbers of retail stores,” a source told Radio Free Asia.

The beer is not yet widely distributed in China. Sources from Shenyang and Dandong said they could find only a few stores selling the beer in Xita Street where many Koreans live and in Korean gift shops.

North Korea’s popular beer costs 20 yuan ($3) a bottle, four times the price of regular brands in Chinese grocery stores.

“The beer has a soft, rich flavor with more alcohol than Chinese beers,” said a Chinese man who tasted Taedonggang beer at a restaurant in Dandong.

“However, the price is too expensive for Chinese citizens to drink regularly.”

Read the full story here:
N. Korean beer sale in China
Korea Times
Lee Jin-a
2015-4-28

Share

North Korea looking to expand foreign trade, turning to EU and BRICS

April 28th, 2016

Institute for Far Eastern Studies (IFES) 

North Korea is seeking to expand its foreign trade by turning to the EU and BRICS (Brazil, Russia, India, China and South Africa) for cooperation.

In the recently published book Looking at Today’s Choson from 100 Questions and 100 Answers, North Korea emphasized the importance of cooperation with EU and BRICS, saying it will “seek various ways to expand its foreign trade.”

The book noted that with the upcoming Pyongyang International Trade Fair (PITF) in May and September, North Korea is looking for grounds to engage in foreign trade to “further the cooperation with many countries around the world.”

The book also stated that North Korea is engaging in a wide range of international trade such as economic cooperation and looking into cooperative business models with Europe, Southeast Asia, Latin America, the Middle East and Africa as well as with international and regional economic organizations such as the EU and BRICS.

However, seeing as the book does not specify detailed ways in which North Korea will take to cooperate with the EU and BRICS, the plan appears as a mere hope.

While the book admitted the difficulty in building an economically strong country while facing the sanctions imposed by the international community, it emphasized that “it [North Korea] is putting its effort in expanding international trade to directly penetrate the sanctions to build a strong socialist state.”

The book also noted that the diversification of active foreign trade will enable “the expansion of width and depth of distribution through dealing with more countries on various industries on many accounts.” The diversification in this context refers to the people in charge of trade and the methods of trade.

Continuing on the idea of diversification, the book mentioned that “not only does the diversification of foreign trade not contradict itself with the independence of national economic stability, but it actually is an important asset in developing the ability of economic independence and its capability,” meaning that diversification should be a key foundation in building an independent economy.

The book explained that the independence of economy is the enhancement of people’s identity and independence that is linked to the domestication of materials. Therefore, beginning with coke (coal) gasification, Juche-iron, Juche-refractory material production line, Juche-fertilizer, and Juche-textile production line will be completed, for instance.

According to the book, this will be the core foundation in speeding up economic development in association with the domestic materials parring with international market prices to stay in market competition. It also stated that this is “not only a matter of economic efficiency, but also a fierce fight against enemy states in the war of defending socialism.”

Share

DPRK builds replica Blue House

April 27th, 2016

Blue-house-replica-ROK

The-real-blue-house

Pictured above: (Top) South Korean military image of the replica blue house built in North Korea (Bottom) A Google Earth satellite image of the Blue House in Seoul.

The South Korean military is reporting that the North Koreans have built a replica of the Blue House in “Dewonri/Daiwonri”. According to the Japan Times:

North Korea is preparing to blow apart a replica of South Korea’s presidential Blue House on an artillery range outside Pyongyang, in an apparent propaganda exercise, the South’s military said Wednesday.

An official with the Joint Chiefs of Staff in Seoul said the North’s military had been detected building the half-sized replica at the Daiwonri range near the capital earlier this month.

“The North is apparently preparing to showcase a mock attack on the Blue House using the replica as a target,” the official said.

Around 30 artillery pieces, hidden under coverings, have been brought to the range.

“The exercise is believed to be aimed at stirring up hostility against the South, summoning up loyalty (to leader Kim Jong Un) and fueling security concerns in the South,” the official said.

I refer to this area as the “Taewon-ri (대원리) Artillery Range”, and I have previously written about it at NK News here. The Americans call the location “Sungho Dong Military Training Area”.

The South Korean military also released a second photo:

area-near-Taewon-ri

You can see this location on Google Earth at 38.944429°, 125.886490°, however the replica Blue House is too recently built to appear on Google Earth imagery.

Share

FAO: North Korean food production falls for the first time since 2010

April 27th, 2016

By Benjamin Katzeff Silberstein

27 April 2016, Rome – North Korea’s total  food production – including cereals, soybeans and potatoes in cereal equivalent – is estimated to have fallen in 2015, the first drop since 2010, and is expected to worsen food security in the country, according to a FAO update issued today.

Last year, total food production in North Korea (officially known as the Democratic People’s Republic of Korea) is estimated to have been about 5.4 million tonnes compared to 5.9 million tonnes in 2014, marking a 9 percent decrease, the update said.

In particular, production of paddy rice, the country’s main staple, dropped by 26 percent to 1.9 million tonnes, mainly due to poor rains and low availability of water for irrigation.

FAO’s estimate for the country’s cereal import requirements for the 2015/16 marketing year (November-October) amounts to 694,000 tonnes. With 300,000 tonnes expected to be covered by government imports, the uncovered deficit of 394,000 tonnes represents the highest gap since 2011/12, the report said.

The estimates are based on official production figures and analysis by FAO’s Global Information and Early Warning System (GIEWS) in collaboration with the European Commission’s Joint Research Centre.

Food security set to deteriorate

Given the tight food supplies in 2015/16, the country’s food security situation is expected to deteriorate from the previous year when most households were already estimated to have poor or borderline food consumption levels.

Crop overview

Besides severely affecting the rice crop, the dry conditions during the 2015 main season, coupled with low irrigation water availability following recurrent dry spells since July 2014, also impacted negatively on the production of maize, the country’s second most important cereal crop. Despite an expansion in plantings, maize output is estimated to have decreased by 3 percent to 2.29 million tonnes in 2015.

The report noted that the output of more drought-resistant soybeans – the most important source of protein in North Korea -increased by 37 percent to 220,000  in 2015.

Similarly, the output of other cereals (sorghum, millet, buckwheat) is put at 156,000 tonnes, almost triple the level of 2014.

Production of 2016 early season potatoes and minor wheat and barley, to be harvested from June, is forecast at 363 000 tonnes, 21 percent higher than the sharply reduced 2015 level.

Fuel and fertilizer shortages

Today’s update noted that reduced supplies of fertilizer and fuel in 2015 also limited crop production in 2015.

Source:
North Korea’s food production falls for first time since 2010 as water scarcity hits agricultural sector
Food and Agriculture Organization of the United Nations
04/27/2016

The full FAO report that the press statement refers to can be found here.

Share

Kim Jong-un’s new private Sinchon runway

April 21st, 2016

Sinchon-Runway

Pictured Above (Google Earth):  A 2015-10-26 satellite image of the new runway constructed at the Kim family compound in Sinchon ( 38.350362°, 125.534610°)

I reported in Radio Free Asia this week on Kim Jong-un’s new Sinchon runway. This is the 6th small-craft runway to be built in the Kim Jong-un era and the fifth to be built to service a restricted family compound. We know that this is a Kim family compound because Kenji Fujimoto visited it and took pictures.

The runway is approximately 600m long and was built between January and October of 2015. It appears to be built of concrete, unlike some other runways that appear to be made of asphalt, and there do not appear to be any facilities for sheltering, refueling or repairing any aircraft that land here–indicating that it is not a node in Kim’s transportation network.

Unlike the family compounds in Kangdong and Wonsan, this Sinchon residence has not been featured in any official media, so it is unclear how many times Kim Jong-un has actually visited the place. It is most known for its hot spring pools and saunas.

The compound was already served by dedicated highway linking the compound to the Pyongyang – Kaesong Highway, and there is a train station nearby that has been equipped to receive trains thought to be carrying the former leaders.

The only other noticeable change has been the expansion of the security perimeter on the northern side of the compound.

 

 

Share

Pyongyang’s ‘Mirae Shop’ opens, showing Kim Jong Un’s emphasis on science and talents

April 21st, 2016

Mirae-shop-2015-8-6

Pictured above: The Mirae Shop (R) and Mirae Health Complex (L)

Institute for Far Eastern Studies (IFES)

Mirae Shop’ (literally ‘future shop’) has reopened, showing the importance and privilege being placed on developing science and talented people in the Kim Jong Un era. The store is located along the banks of the Pothong River in Pyongyang. On April 12, state media outlet Korean Central News Agency (KCNA) reported that “since the store’s reopening in early April, it has been packed with scientists, engineers and people coming in every day.”

Mirae Shop was first opened in 2012 and recently moved to its current location. The store’s architecture portrays rockets and earth-like pillars holding up the roof. The store sells domestically produced goods such as home appliances, cosmetics, daily necessities, and food.

The name of the shop was chosen to by Kim Jong Un to commemorate the late Kim Jong Il’s visit to the store in January 2012. He ordered during on-site instruction last March to “open the store as soon as possible to let not only scientists and engineers but everyone to come and shop as much as they please.”

Prior to the construction of the store, Kim Jong Il himself took charge of the store’s site, architectural design, construction, construction materials, and products guarantee policy and on December 15, 2011, just before his death, he ordered for “the store to be used by scientists and engineers.”

Mirae Shop opened initially in 2012 in Pyongyang to commemorate the 100th anniversary of Kim Il Sung’s birth. It was opened for scientists and engineers to shop. KNCA also introduced the store and explained how the name was chosen by Kim Jong Un. The report also underscored how development of science and technology is the key factor in the country’s prosperity.

According to KCNA, this store has a variety of popular products from home appliances to groceries and has a wide range of customer services such as personal tailoring, watch/clock repairs, elevators wide enough to accommodate shopping carts, and fountain drinks served in the lounge.

The store is used mainly by the employees and researchers from Kim Il Sung University and Kim Chaek University of Technology and scientists from the National Academy of Science.

I have also written about the Mirae Shop and Health Complex in Radio Free Asia.

Share

Kim Jong-un’s Party Congress prep: construction projects

April 19th, 2016

By Benjamin Katzeff Silberstein

Kim Jong-un has made at least two announcements recently, as the Korean Worker’s Party heads for its 7th Party Congress in May, about construction projects to be done. One of them is an orphanage in Ryanggang province, Daily NK reports:

Projects underway to promote Kim Jong Un’s legacy as a leader ahead of the 7th Party Congress in May are said to be in full swing across the nation. One such project taking place in Ryanggang Province calls for the full mobilization of residents to build an orphanage as an expression of the leader’s “love for the next generation,” Daily NK has learned.

“Authorities have recently been harassing residents saying that the orphanage under construction next to Kim Jong Suk Teachers’ College in Yonbong-dong needs to be ready for the Marshal’s (Kim Jong Un) inspection by the time of the Party Congress,” a source in Ryanggang Province told Daily NK on Thursday. “The provincial party office has been hurrying people along, claiming the construction must be completed before the event.”

Progress was said to be slow during the winter, which was unseasonably cold, but construction efforts are now appearing to ramp up.

The project is being driven by the provincial head secretary and other cadres from the provincial Party and People’s Committee and is being promoted as a means to express loyalty to the leader, who has emphasized his “love for children,” said the source.

She added that cadres associated with the efforts, who have confidently stated that the facility will see completion before the Party Congress, have also been intensifying crackdowns on those seeking to avoid mobilization, out of concern that failure to complete the project on time may lead to issues of accountability.

“Vendors who are busy trying to make a living in the market were often able to get out (of mobilization) with bribes, but even that isn’t easy now,” a separate source in Ryanggang Province explained.

“The price for skipping a day of mobilization is now up to 10 RMB (13,000 KPW) a day per head, so some find it more affordable to just go to the construction site.”

The 13,000 KPW demanded is enough to purchase approximately 2kg of rice based on current prices, which is far from negligible for most members of the public. The higher price tag in effect acts as a tool to turn up the heat on people for mobilization.

The pressure to complete the project before the major political gathering has led to mobilization of students in the afternoons and workers at state-run factory as well.

The near full mobilization also involves specialized colleges, meaning that among the younger generation, stormtroopers (who are working on a railway project in Samjiyon) are seemingly the only group among ordinary residents that are exempt from the orphanage project.

Full article:
Kim Jong Un calls for construction of new orphanage in time for Party Congress
Kang Mi Jin
Daily NK
2016-04-19

IFES at Kyungnam University has also published an analysis of the news about the Ryomyong street project, which Curtis has already written about in this blog. They note that the recent sanctions do not seem to have altered plans for the project. Kim Jong-un’s rhetoric instead highlights the project as a blow against the international community and the US — North Korea will go full steam ahead on its own policies and no outside pressure can hold them back (my emphasis below):

On March 18, the state media Korean Central News Agency (KCNA) reported that Kim Jong Un declared the construction of ‘Ryomyong Street’, which is to be built between Kumsusan Palace of the Sun and the Ryonghung Crossroads in Pyongyang. The street’s name signifies a place where ‘the dawn breaks in the Korean revolution’. Kim also mentioned that the area is to be surrounded by magnificent skyscrapers and multi-level buildings that fit the geographical characteristics surrounding the palace, displaying the Party’s idea of giving importance to science and talents in socialist Korea.
[…]
Along these lines, Kim put emphasis on the policy of securing building materials in constructing the new street and to diversify the size, design and color of decorative objects on the exterior of buildings. He also instructed for the mobilization of ‘soldier-builders’ who previously worked on the construction of Mirae Scientists Street. The construction of the new street shall be carried out with “Mallima speed” during the country’s ‘70-day campaign’ in run-up to the Party Congress scheduled for this upcoming May. The news report also stated that “the party, state, and society should render positive assistance to the construction and the Cabinet, commissions, ministries and national institutions take the lead in this work.”

According to the report, Kim Jong Un also said that “The construction of the street is not merely for formation of a street but serves as a political occasion of clearly showing the spirit of the DPRK standing up and keeping up with the world, despite all sorts of sanctions and pressure by U.S. imperialists and their followers, the appearance of the country advancing to realize the great ideal of the people and truth that the DPRK is able to be well-off in its own way and nothing is impossible for it to do.” The construction of the street appears in part as a means to show off the strength of ‘Songun’ Korea, following in the footsteps of Kim Jong Il’s policy.

Despite the strong sanctions imposed upon the country by the international community, North Korea is striving to achieve some form of economic success. The 70-day campaign has been initiated in the run-up to the Seventh Congress of the Workers’ Party. North Korean media are boasting about the country’s successes on the production front since the campaign’s initiation, saying “under the Juche ideology, people are working hard especially in the fields of electricity, coal, metal, and railroad transportation that they have achieved great success in the [campaign’s] first week.”

Full article here:
North Korea to Construct ‘Ryomyong Street’ Despite Sanctions
Institute for Far Eastern Studies
03-29-2016

Share

North Korean state takes over foreign currency stores

April 19th, 2016

By Benjamin Katzeff Silberstein

Donju life might not always be what it is cracked up to be. Radio Free Asia reminds us that regardless of how well North Korea’s upper-middle class traders might be doing, the economic framework is still highly arbitrary:

North Korean hard currency shops providing foreign products for sale to the country’s wealthier citizens may soon see a full government takeover of its supply chains, leading to a drop in the quality and hike in the price of hard-to-obtain goods, North Korean sources say.

The stores, which require payment in Chinese yuan or U.S. dollars, have operated in recent years in Pyongyang and other large cities under the management of private businessmen who pay large portions of their profits to the central government.

Government-run trading firms are now poised to take over the purchase and pricing of products sold in the lucrative stores, though, a source in China’s Dandong city, just across the Yalu river from North Korea, told RFA’s Korean Service.

Until now, shop managers have gone to China themselves to bring back products—including clothing, cosmetics, and furniture—or sale in their stores, RFA’s source said, speaking on condition of anonymity.

“If this system of supply changes, not only will store managers be prevented from going to China, but no use will be made of their marketing and management skills,” the source said.

Once the new system is implemented, stores will have to submit a list of needed products to their city’s local trading firm, which will then make the purchases from China itself, the source said.

“There are doubts that [the government] will be able to supply needed products on time, though, and the change in quality and price of the items may lead to conflicts between store managers and the trading organizations handling product supply,” he said.

Profit grab seen

Separately, a source in the capital Pyongyang said no official statement announcing the change has yet been made.

“But there is a high possibility the new system will be established after the [ruling Korean Workers’ Party] convention in May,” he said.

If put in place, the move may be aimed partly at further reducing the profits earned by store managers, who already pay most of what they earn to the government of the reclusive, U.N.-sanctioned state, the source in Pyongyang said.

“North Korea’s foreign currency situation is urgent now,” the source said.

“From now on, the managers of foreign-currency shops will receive only a small salary, as they did in the past,” he said.

“Sales will drop, though, and the management will experience difficulties,” he said.

Full article here:
North Korean ‘Foreign Currency’ Stores Face State Takeover
Jonhoo Kim
Radio Free Asia
04-19-2016

Share

Choson Exchange 2015 report

April 19th, 2016

Choson Exchange has published their 2015 annual report. Read it here to learn about the interesting work they are doing in the DPRK.

Share