Archive for September, 2005

NK’s Chang Song-taek Ousted Completely: Intelligence Sources

Tuesday, September 27th, 2005

Korea Times
Park Song-wu

The Pyongyang regime has described Chang Song-taek, North Korean leader Kim Jong-il’s former right-hand man, as a “tree’’ that is now cut off, sources well-informed of the North’s power structure in Seoul said on Tuesday.

Chang, Kim’s brother-in-law and a confidant until purged in late 2004 for an alleged bid to enhance his power, was predicted to return to the Workers’ Party because the Dear Leader, 63, reportedly has a limited number of associates to rely on.

But such a possibility looks slim now as Kim has apparently changed his mind, according to sources in Seoul.

“(Chang) was predicted to make a comeback in the past because he was such a close confidant (of Kim Jong-il),’’ the Yonhap news agency quoted a source as saying. “But now almost all the people who, for example, have simply eaten naengmyon (or Korean cold noodles) together in the Yokryukwan restaurant (in Pyongyang) have been expelled to local areas. The likelihood of Chang’s comeback is near zero now.’’

Chang was formerly vice-director of the party’s exceptionally powerful bureau _ the Organization and Guidance Department. High-profile defector Hwang Jang-yop once described him as the “No. 2 man’’ in North Korea.

Now Ri Che-kang (phonetic), new vice-director of the potent department, is known to be in charge of removing Chang and his close allies from the political scene.

The intended purge of Chang, 60, is allegedly a result of his efforts to promote Kim Hyong-nam, an illegitimate son of Kim Il-sung, the founding father of North Korea, as a contender to Kim Jong-il.

Kim Hyong-nam, 33, was adopted at birth by a sibling of Chang, according to a country report on North Korea by the Economist Intelligence Unit.

The expulsion process resembles one that took place in the 1970s when the Pyongyang regime underwent a power struggle during which “side branches’’ of Kim Il-sung were trimmed away.

At that time, the regime purged Kim Il-sung’s uncle Kim Young-ju as well as others, including the leader’s second wife Kim Song-ae (phonetic) and her children. In 1976, Kim Young-ju disappeared from the political scene and did not re-appear until 1993 when he returned to the Party Central Committee.

Chang is reportedly in a bad state of health now. Even if Kim Jong-il reinstates him, he is unlikely to return to the party. Sources in Seoul predicted that the most likely scenario is that Chang will be named an ambassador _ a job which cannot influence domestic politics.

Kim Jong-il has not yet decided who will succeed him, even though his own ascension to power was carefully prepared over more than 20 years.

There are three known rival candidates for the succession _ all Kim Jong-il’s sons, by two mothers, neither of whom he married.

The eldest, Kim Jong-nam, 34, was reportedly the favorite until 2001 when he was caught visiting a theme park in Japan on a false passport, embarrassing the Pyongyang regime.

Kim Jong-nam’s two rivals are his younger half-brothers _ Kim Jong-chol, 24, and Kim Jong-woon, 22. Kim Jong-il is said to favor Kim Jong-woon, as the more manly of the two, the country report said. Their mother, Ko Young-hee, a former dancer who became his consort, died of cancer in 2004.

Her death triggered numerous media reports predicting an imminent power struggle in the Pyongyang regime, which is described by the Western media as a “Communist dynasty.’’


North Korea rejects UN food aid

Friday, September 23rd, 2005


North Korea has formally told the UN it no longer needs food aid, despite reports of malnutrition in the country.

Deputy Foreign Minister Choe Su-hon said the country now had enough food, due to a good harvest, and accused the US of using aid as a political weapon.

Top UN relief co-ordinator Jan Egeland said an “abrupt” end to food aid would harm North Korea’s most vulnerable.

Pyongyang’s move comes as the world community continues to urge it to give up its nuclear ambitions.

Analysts say North Korea might be worried that accepting more food aid now could be perceived as a sign of weakness.

The North may also have lost patience with efforts by foreign agencies to monitor deliveries of food, according to the BBC’s Seoul correspondent, Charles Scanlon.

In recent years, the UN and other international agencies have been feeding up to six million of the poorest and most vulnerable North Koreans.

But these organisations have long struggled for access to one of the world’s most closed societies.

Even at the height of a famine in the mid-1990s, which may have killed two million people, they were tightly restricted and refused entry to large parts of the country.

Now the authorities are cracking down altogether, our correspondent says.

After meeting UN Secretary General Kofi Annan in New York on Thursday, Choe Su-hon told reporters: “We requested him to end humanitarian assistance by the end of this year.”

He said that the North wanted all foreign NGOs out by the end of the year, and added that the UN was to stop delivering food aid and to focus on long-term development instead.

Mr Egeland urged North Korea to reverse its decision, saying he was especially worried about the country’s children.

“Our concern is they (North Koreans) will not be able to have enough food. We are very concerned because we think this is too soon and too abrupt,” he said.

Gerald Bourke, a spokesman for the WFP, said that UN staff were currently discussing with the North Korean government what this meant in practice – adding that he was hopeful that current food-for-work and other community-based projects would class as longer-term development.

“We’re also talking to donors to see how much they still want to help us in this way,” he added.

Mr Bourke said that despite Mr Choe’s assertion of a better harvest in North Korea this year – and his pledge that the government was “prepared to provide the food to all our people” – there was still a considerable need for food aid.

“North Korea has a substantial and chronic food deficit,” Mr Bourke said, adding that malnutrition rates, especially for mothers and young children, were still very high.

Political issue?

Mr Choe also accused other countries, especially the US, of attempting to “politicize humanitarian assistance, linking it to the human rights issue”.

He said this constituted interference in the internal affairs of the country.

Washington rejected the suggestion it was mixing politics with relief work.

“All US decisions are based on… the need of the country involved, competing needs elsewhere and our ability to ensure that the aid gets to people who need it most,” a State Department statement said.

Another problem which analysts believe may have led to the North’s decision to ask foreign organisations to leave is the extensive surveying these groups are required to do, to ensure their money is being well-spent.

“Part of the problem is with our monitoring people moving around the country,” Mr Bourke conceded. “This is and has been a concern for them.”

In contrast, China and South Korea provide huge food shipments to North Korea without overseeing where it ends up.

The South says it gives such aid as part of a strategy to promote political reconciliation.

But diplomats and aid workers say these generous shipments have undermined the multilateral effect.

According to our correspondent, there is concern that if monitoring stops, so too will surveys to check the food gets to those most in need.


Chinese takeover of Raijin-Sonbong

Friday, September 23rd, 2005

From NK zone:

China and North Korea have signed a 50-year agreement that will give the Chinese border city of Hunchun exclusive rights over the North Korean port of Rajin, according to Chinese and South Korean reports.

The deal is seen as a boost to this underdeveloped region of China and to Hunchun in particular which is about 80 km inland on the Tumen river. It also envisages that Hunchun will establish a 5-10 sq km industrial zone in Rajin and for a highway to be built between the two cities.

A Chinese-language report posted last month describes how Hunchun, although it was given border trade rights with North Korea as long ago as 1986 and was made an “open city” in 1992, has seen little benefit from these privileges, despite national, provincial and local level investment totalling five billion yuan ($600 mln) as part of the Tumen River Development Zone. The report says this resulted in an economic bubble in the early 90s, with vast numbers of half-built factories, offices and roads and a border bridge that was never completed.

The aim has long been for Hunchun to have access to a nearby port in North Korea or Russia and to dredge the Tumen river, but the report says that while it has reached a navigation agreement with Russia it had failed to reach agreement with the DPRK. It also notes that dredging would have serious environmental implications (doesn’t enlarge on this but see below). It adds that plenty of landlocked countries are economically highly successful and that there are plenty of other cases “leasing ports to reach the sea”.

Thus even before the Rajin deal was signed there were hopes that Hunchun would in the next 10 years become the most advanced city in the Yanbian region after the capital, Yanji and eventually become the “Rotterdam of the north[east?!].”

Anyhow the agreement with Rajin has of course been greeted as a great victory and comes as the Tumen River Area Development Programme agreed to extend its 1995 Agreement on the establishment of a Consultative Commission for a further ten years and to expand its geographical reach to include the three Northeastern provinces and Inner Mongolia in China, the Rason Economic and Trade Zone of DPRK, eastern provinces of Mongolia, eastern port cities in South Korea and part of the Primorsky territory of Russia.
However, another Chinese report is sceptical about the deal which it says also involves construction of a 67-km highway and plans for the Rajin area to become a processing zone for Chinese goods which will then be reexported to southeast China.

It quotes a Jilin province commerce bureau official as saying as saying only time will tell whether it will achieve its aims, and also cites an unnamed professor from the Jilin Academy of Social Sciences as saying that North Korea’s ports, railways, roads, power and water networks and communications are extremely backward and badly maintained and development has also suffered from the “instability of [North Korean] government policy.”

The deal with North Korea follows failure to reach a similar agreement with a Russian port. The People’s Daily reported in 2003 that the Russian Ministry of Communications was opposed to a proposed 49-year deal with either the port of Zarubino or Posyet, both just over the Chinese border, because it viewed the Chinese as having territorial designs on the region, which China of course denies.

The Chinese article about the Rajin deal also gives some figures for Jilin’s border trade. It says this totalled $250 mln last year, consisting of $80.07 mln worth of exports to North Korea and $114.5 mln in imports (presumably the rest consists of trade with Russia, etc). Main exports consisted of machinery, grain and flour, textiles, steel, cars and coal. “Because the railways and other means of transport are poor and there are long delays, this was bad for our province’s exports of coal, grain and other bulk items,” the Jilin commerce bureau official said, adding that transport was the main factor impeding the province’s foreign trade.

A Chinese report posted last December says Hunchun officials had visited Pyongyang several times in the last year and had found North Korean officials eager to improve road and sea communications in order to create a “northeastern golden triangle.” It says leasing a nearby port across the border is the best option, and mentions a South Korean clothing company which saved much money and time by switching to Zarubino port in Russia (only 70 km from the border) from far away Dalian in China.

It adds that there are plans for an export-oriented abattoir at Hunchun with a capacity of 200,000 cattle and sheep per year. It also says Hunchun expected to handle $220 mln worth of foreign trade last year and in January-October 2004 it handled 172,300 tonnes of imports and exports, up 7.9% over 2003.  A North Korean trade official gave the Rajin zone his blessing in 1999, as did a professor of economics from Kim Il Sung University.

Development of the area would no doubt improve living standards, but it would also have serious environmental implications. the Tumen Development Programme notes that the Hunchun Border Economic Cooperation Zone was established in 1992 without an environmental impact assessment (EIA). “Since then, considerable investment has taken place and Hunchun’s population has multiplied many-fold, with serious implications for nearby wetlands and other ecosystems.” It adds that “in 1999, the Tumen Programme undertook a long-overdue EIA of the Zone to meet international (World Bank) standard and serve as a model for other development areas in the Tumen Region.”

Eastern Siberia and the Chinese border are is the last remaining stronghold of the Siberian (or Manchurian) tiger and it is also has crucial sites for a large number of bird species including about 50 species listed in the international red book of endangered species.

The Hunchun area is where most NK refugees cross into China, so economic development would presumably make North Koreans less likely to flee their miserably poor country, though improved communications may make it easier for them to do so…

The famous or infamous Emperor casino is also not far away. As NKZ readers will doubtless recall it was closed in January after a Chinese crackdown against gambling as its clientele was entirely Chinese. Little has been heard about it since though the management are apparently hoping to attract Europeans to replace the Chinese, not sure that habitués of London casinos are likely to be greatly tempted… Am also told that the Emperor isn’t totally closed but it does have extremely few customers.

Anyhow its two websites are still up, click here for the Chinese one and here for the Hong Kong one.

According to a Chinese report, Chinese gamblers are now flooding into Vladivostok following the closure of the Emperor (so much for the crackdown against gambling in border casinos…)


North Korea’s capitalist manifesto

Thursday, September 22nd, 2005

Christian Science Monitor

A predictable master of surprise, North Korea stunned the world Monday by agreeing to give up its nuclear weapons program. But to seal the deal by pinning down the difficult details, it’s necessary to ask what’s really motivating the hermit nation.

North Korea won’t make it easy for itself in fulfilling this pact. Within 24 hours after the “consensus statement” was inked by North Korea and five other governments (US, China, Japan, Russia, South Korea), the North – contrary to the agreement – proclaimed it would abandon its nuclear program only after it’s been given a new light-water reactor for producing electricity. That could mean it would be able to keep producing nuclear weapons for years. The North will also probably resist on-the-ground verification of its nuclear program – and the few bombs presumably already produced; the regime of Kim Jong Il hardly lets foreigners run around freely.

The US and China, as erstwhile partners in trying to denuke North Korea, must keep reminding Mr. Kim why he needs – and probably wants – to live up to this agreement, and quickly: His Stalinist command economy, which has been closed to the world for half a century, faces collapse and possibly another famine like the one in the mid-1990s, when some 2 million people died.

Kim, who titles himself Dear Leader, appears to know his own political survival is on the line. In 2001, he was invited to China and saw how that communist regime has been able to stay in power while allowing a market economy to thrive. The next year he freed up prices and wages, and loosened many government controls over businesses and individuals.

Local farmers markets have since sprung up, and small service shops are appearing in cities. Last year, a new dictionary was issued, and for the first time it contained the phrase “market economy” (which is a communist way of saying capitalism).

But the reforms were done badly. The nation now has spiraling inflation. Its economy has contracted for the past three years. Great gaps in wealth are appearing, even as North Korea’s economy remains a fraction of the size of South Korea’s. The 70 percent of the population that still relies on government food has seen their rations greatly reduced.

Last spring, the reform-minded prime minister, Pak Pong-ju, visited China and was spirited to Shanghai, where he saw the missing element for North Korea’s economy: foreign investment and an influx of hard currency. He went back and told bureaucracy to learn about foreign markets and trade. The universities began to teach market basics, such as supply and demand.

But to improve its shaky experiment in capitalism, North Korea needs to stop scaring away potential foreign investors with its nuclear belligerence and abandon its long-held ideology of juche, or self-reliance. Both steps are risky for a dictator who has blinded his people to the world around them.

The Bush administration has probably bought into China’s strategy of dangling economic benefits before Kim to get him to denuclearize. Withholding those benefits will be necessary if further talks falter.

Once bitten, though, the capitalist apple may be too tempting for Dear Leader.


The Big Picture

Tuesday, September 20th, 2005

Korea Times
Andrei Lankov

North Korea is a country of portraits _ portraits of Kim Il-sung and Kim Jong-il, that is. The portraits are ubiquitous. They are to be placed in every living room, in every office, in every railway (and, by extension, subway) carriage but, for some reason, not on buses or trolleybuses. The portraits adorn the entrances of all major public buildings, railways stations and schools. Reportedly, in the late 1990s, the largest portrait of Kim Il-sung within the city limits of Pyongyang graced the first department store in the very center of the North Korean capital. The portrait was 15 meters by 11 meters.

North Koreans have been living under the permanent gaze of the Great Leader for more than three decades. In the late 1960s, North Koreans were ordered to place these icons in their homes and offices. By 1972, when Kim’s 60th birthday was lavishly celebrated, North Korea had much greater density of portraits than could ever be found in Stalin’s Russia or Mao’s China _ the two countries that bestowed this peculiar fondness for the Leader’s portraits on Korea.

In the late 1970s, the North Koreans received another set of instructions. They were ordered to display the portraits of Kim Jong-il, the heir designate. This had to be done “unofficially.’’ The propaganda insisted that there was a widespread movement of North Koreans who, purely out of love for the son of their ruler, began to adorn their dwellings with his portraits. Only in the late 1980s did Kim Jong-il’s portraits appear in public space, and from the early 1990s on they have been the same size as those of his father and they are put together in rooms and offices.

All portraits are produced by the Mansudae workshops that specialize in making images of Kim Il-sung, Kim Jong-il and their relatives. They are framed and glassed (and only the best glass and timber will do!).

In different eras, the Kims were depicted in diverse manners, and these changes tell a lot about changes in ideology and policy. In the 1960s and 1970s, Kim Il-sung wore a Mao suit, stressing the austerity and quasi-military character of the regime. In the mid-1980s, these portraits were replaced with new ones, depicting Kim Il-sung in a Western-type suit. This signalled the relative openness of the regime in the late 1980s. After Kim Il-sung’s death in 1994, the new portraits also showed him in suits (incidentally, these portraits were called a “depiction of the Sun’’ since in his lifetime Kim was “The Sun of the Nation’’). However, from early 2001, Kim Il-sung has appeared in newly issued portraits in the military uniform of a generalissimo.

Kim Jong-il’s portrait also underwent similar changes. Initially he was also depicted in the dark-coloured Mao suit, once his favourite. However, the 2001 version showed him in the grandeur of a Marshal’s uniform. This once again confirmed the importance of the “army-first policy’’ proclaimed by Kim Jong-il, North Korea’s Glorious Marshal who _ unlike a vast majority of North Korean males _ never served in the military himself.

Even within private houses, the portraits are treated with the greatest of care. They are put on one of the walls, and that wall cannot be used for any other images or pinups. There are rules prescribing how exactly these icons should be placed. When a North Korean family moves to another place, they must start by hanging the Kims’ portraits on the wall. Random checks are conducted to make sure that proper care of the portraits is taken.

In the military, the portraits are hung in all rooms in permanent barracks. When a unit departs for a field exercise (as North Korean units do often), the portraits are taken with them. Once the platoon prepares its tent or, more commonly, its dugout, the portraits are placed there, and only after this ritual is the provisional shelter deemed suitable for life.

Oftenl the portraits become an important part of ritual. In schools, students are required to bow to the portraits and express their gratitude to the Great Leader who, in his wisdom and kindness, bestowed such a wonderful life on his subjects. The portraits feature very prominently in marriage ceremonies as well. The couple has to make deep bows to the portraits of the Great Leaders. This tribute is very public and serves as a culmination of the wedding ritual. It does not matter whether the wedding ceremony is held in a public wedding hall or at home.

The portraits are jealously protected. Even incidental damage of the portrait might spell disaster for the culprit. But that is another story…


My Name Is Min, Mrs. Min…

Tuesday, September 13th, 2005

Korea Times
Andrei Lankov

One can imagine how the friends and relatives of Min Yong-mi, a 35 year old housewife, were shocked to learn in June 1998 that the woman was detained as a South Korean special agent who had undergone special training and snuck herself into the North to destabilize the North Korean government.

What did earn the woman, an otherwise quite typical South Korean ajuma, a mother of two children, such a James Bond style reputation? Obviously, few comments she made on June 20, 1999, when talking to a guide while on tour in the Kumgang Mountains.

Actually, the description of what happened at 1:40 pm differ. All reports agree that the entire affair began when Mrs. Min asked a North Korean tour guide or “environmental inspector” how to read a rare Chinese character in one of the names of the Buddha that was carved on a rock. The “inspector” (in all probability, a plain clothes policemen) did not know the character as well. The conversation followed.

According to one version, Mrs. Min merely said that after unification the guide would be able to meet her in Seoul. However, it is more likely that the talk was far less innocent. Obviously, somehow Mrs. Min and her guide began to talk about defectors to the South (still a relatively small group in those days). Mrs. Min assured her North Korean interlocutor that the defectors were doing all right. The guide expressed his disbelief and said that all defectors are sentenced to hard labor. Mrs. Min assured him that this was not the case and said something like “If you come to the South, you will see for itself.” According to another version, she said something more moderate, to the effect that defectors were getting by quite well in the South.

Whatever the case, she was ordered to surrender her provisional ID and pay a fine of $100. Realizing that she was in trouble, Mrs. Min complied immediately, but it was too late. She was detained, accused of subversive propaganda, and spent about a week in detention, being interrogated by officers who arrived from Pyongyang.

The detention of Mrs. Min was the first crisis in the history of the Kumgang Project, then as now the largest joint operation of the two Koreas, a showcase of economic cooperation between the two governments.

The project was conceived in 1989, when Chung Ju-yung, the founder of the Hyundai Group, visited North Korea for the first time. One of the schemes briefly discussed in 1989 was an idea of a large tourist park in the North, to be patronised by South Korean tourists. The park was to be located in the Kumgang (“Diamond”) Mountains which for centuries have been regarded in Korean culture as an embodiment of scenic beauty. The mountains conveniently lay near the DMZ, the border between two Korean states.

It took, however, a decade and some major political changes to start the project moving. It was only in November 1998 that the Kumgang Mountain Tourist Project began to operate.

The idea was simple. The North Koreans created a type of ghetto for the South Korean visitors. A part of the Kumgang Mountains was fenced off, and the local population was moved away. The South Korean tourists took a cruise ship to the area. The ship moored in a local harbour, while the visitors went on mountain walks and sight-seeing trips.

This clever scheme solved the greatest problem Pyongyang saw in its interactions with the South – the problem of information flow. The North Korean commoners are supposed to believe that their South Korean brethren are suffering under the cruel yoke of the US imperialists. Understandably, their government does not want them to know that the per capita GNP in the South is 20 to 30 times higher than in the North. In the Kumgang Mountain Project the rich Southerners were kept out of sight of the average North Koreans, being accompanied only by a handful of carefully selected minders.

However, there always was a threat that South Koreans would do something improper. They were instructed before their trip not to talk politics at all. But how could those spoilt people from a decadent bourgeoisie society be trusted to behave themselves? A subject lesson in obedience was needed.

Some circumstances make us suspect that the entire affair was prepared in advance, and that the guide was deliberately provoking Mrs. Min. However, this is likely to remain uncertain until the collapse of the North Korean regime and the de-classification of their documents. It is still probable that Mrs. Min was simply unlucky. But it is clear that the North Korean side expected something like it to happen.

Mrs. Min’s ordeal lasted for a week. Pyongyang radio claimed her as a South Korean spy, the tours were suspended for a time, and frantic diplomatic activity ensued. Mrs. Min was released after six days of detention, to spend some time in hospital. But the North Korean authorities had attained their goal: they demonstrated that tourists are better to mind their tongues while enjoying the scenic beauties of the Kumgang area.

There were more detentions of South Korean tourists, none of which received comparable publicity. But the lesson had been given, and South Koreans learned to behave themselves.

The Mrs. Min incident contributed to the ongoing crisis of the Kumgang project. This crisis came to a climax in spring 2001 when the tours were almost discontinued. The Kumgang project was salvaged by a large-scale government intervention, but that is another story…


Wayward Food Aid in North Korea?

Tuesday, September 13th, 2005

US News and World Report
Thomas Omestad

It is a question that policymakers in the Bush administration, other governments, and private relief agencies have pondered for years: How much of the considerable international food aid sent to hungry North Korea has been diverted away from its intended beneficiaries? The debate is not likely to end, but a significant study released this month by the U.S. Committee for Human Rights in North Korea takes a stab at an answer: 25 to 30 percent of it.

However, say the report’s authors, that diversion may not be the disaster it initially seems to be. Much of the redirected aid appears to move back into North Korea’s nascent food markets, where it is available to people who have earned the outside income to afford it. The diversions do not appear to be centrally directed but rather reflect the actions of North Korean agencies and people who are seeking financial gain, say the report’s authors, Stephan Haggard, director of the Korea-Pacific Program at the University of California–San Diego, and Marcus Noland, a senior fellow at the Washington-based Institute for International Economics.

The 56-page report (“Hunger and Human Rights: The Politics of Famine in North Korea”) is released at a sensitive moment: Talks among six nations, including North Korea, aimed at persuading the North to abandon its nuclear weapons programs are scheduled to resume today. Pyongyang delayed the resumption of the talks by some two weeks, saying it was reacting to the naming of a U.S. official to focus on human rights problems in the North and to U.S.-South Korean military exercises. The regime will undoubtedly be watching for any moves to back away from international aid commitments to feed the hungry in the nation of 23 million.

North Korea has suffered food shortages for well over a decade, and a famine in the mid- and late-1990s is believed to have killed up to 1 million people–though some estimates have put the figure higher. The public food distribution system staggered under the problem, and many North Koreans are now purchasing much of their food in markets, spending upwards of 80 percent of their income on food. North Korea has received more than $2 billion in food aid over the past decade, the U.S. contribution rising above $600 million of that. The United Nations World Food Program has not been able to meet its food contribution goals this year, a reflection, some analysts say, of international annoyance with North Korea’s stance on nuclear issues.

The report cites what Haggard describes as regime efforts at “systematically blocking NGO [nongovernmental organizations] aid.” Barriers include North Korean limits on the number of food-aid monitors allowed to follow distribution, preventing the WFP from deploying Korean-speaking staff, putting several counties (with 15 percent of the population) off limits, and requiring that inspection visits be announced ahead of time. All of that, the authors suggest, worsens the problem of aid being misdirected. Further, says Haggard, the North Koreans cut commercial imports nearly in tandem with growing food aid from other countries. The meaning: “The North Korean regime was using food imports as a sort of balance-of-payments support,” he says.

Despite their qualms, the authors do not advocate stopping food aid to the North, suggesting that China and South Korea–two countries that have tried to support the North with food aid outside of U.N. channels–would simply step in and fill the gap. They do want South Korea, in particular, however, to make its food donations through the WFP, where the monitoring is at least better. The South Korean government, however, says that it does inspect its distribution site in North Korea and stresses the need for North Korea to undertake an “equitable distribution of food.”

But no one should expect quick fixes to the challenge of verifying that aid to the North goes where it should be going.

“Absolute control is not possible,” Ells Culver, a cofounder of Oregon-based Mercy Corps, said in a recent interview with U.S. News. Mercy Corps is assisting with several agriculture projects in the North. “We’ll never get as much monitoring as in other countries.” Such pragmatism, however imperfect it is, may be the best approach to helping North Korea’s hungry.


North Korean Economic Experts on Study Tour in Germany

Sunday, September 11th, 2005

From the Friederick Naumann Foundation:

During their 12-day visit to Germany, the DPRK delegation consolidated their technical knowledge on market economy which they gained while participating at the seminars organized by FNF in North Korea, so far. Apart from theoretical knowledge on budgeting, expenditure, monetary and fiscal policy, the North Korean economic and financial experts gained also practical insights into the organization of the German financial institutions as well as into methods of tax collection.

The North Korean delegation visited the Bundestag (German Lower House), the Ministry of Foreign Affairs, the Federal Ministry of Economics and Labour, the Federal Ministry of Finance as well as the German Institute for Economic Research (DIW), the German Federal Central Bank and the European Central Bank. The programme included also meetings in the Federal Statistical Office, the State Ministry of Rhineland-Palatinate, the tax office of Mainz as well as the Institute of Finance at the University of Mainz. In many of these institutions the North Korean delegation was the first visiting group from DPRK ever.


Gap Between Rich and Poor in North Korea Growing

Tuesday, September 6th, 2005

Choson Iblo

North Korea’s gap between rich and poor has been growing since the Stalinist country started economic reforms in 2002. While some have managed to better themselves to form something of a nouveau riche class, more than 70 percent are now getting only about half the needed calorie intake from state-run food distribution centers, the Financial Times reported Friday.

The World Food Program’s North Korea director Richard Ragan told the paper the wealthy are concentrated in five cities, including Pyongyang. They are the group that can be seen going to work on their bicycles, which cost triple the average monthly salary in North Korea. The newly affluent work mostly in retail and service industries and include tailors, ice cream sellers and bike repairmen who make money in general markets, which have multiplied to some 300 since 2002. Some farmers selling surplus produce are also part of what passes for a wealthy class in North Korea.

Most of those working in industrial production subsist below the minimum level, and tens of thousands of industrial workers in towns like Hamhung or Kimchaek are losing their jobs. Among those able to work, 30 percent are unemployed, and 70 percent of the population receives 250-380 grams of food a day from state-run food distribution centers — no more than half the necessary daily intake of nutrients.

The FT said the country as a whole is experiencing 130 percent inflation but poverty is no longer shared equally.


Life Without Money

Tuesday, September 6th, 2005

Korea Times
Andrei Lankov

For decades, money did not really matter in the North Korean economy and society. Levels of consumption were not determined by money expended, but rather by access to goods. Everything was distributed, and almost nothing was actually sold, at least from the 1970s when the Public Distribution system reached the height of its power.

Indeed, the history of the North Korean retail industries between 1948 and 1975 was one of a gradual demise of trade as it is generally known elsewhere. By the late 1940s most employees of state enterprises were being issued ration coupons. These coupons allowed them to buy goods at heavily subsidized prices. If they were not happy with them, they could go to the market.

In 1958 private trade in grain and cereals became illegal. For a while vegetables and meat were not rationed, but the number of items subject to distribution kept increasing, and by around 1975 the state shops had actually become nothing but outlets of the PDS. It was legal to buy and sell most goods on the market (grain and liquor remained an exception), however the North Korean economy was so structured that few goods could be produced outside the official economy. For this reason few goods could be channeled to the private markets. Thus, market prices were exorbitant, and people had to survive on what was supplied through the PDS.

However, the economic disaster and famine of 1996-2000 changed this situation. Markets began to spread across the country with amazing speed. In the years 1995-1997 nearly all plants and factories ceased to operate. In the worst period, in early 1997, the average utilization of major plants was reportedly a mere 46 percent of their capacity.

In most areas people still received ration coupons, but these coupons often could not be exchanged for food. Only in Pyongyang and some other politically important areas did food continue to be distributed through the late 1990s, but even here the norms were dramatically reduced: from the pre-crisis level of 500-700 grams a day (depending on one’s perceived value to the state) to merely 150-250 grams daily in the worst days of the famine. Even such small rations were not available to everybody. According to research by Meredith Woo-Cumings, as few as 6 percent of the entire population relied on the PDS in 1997.

Thus, many people, including myself, came to the conclusion that the PDS had died. This impression was reinforced in 2002 when the `economy improvement measures’ (never officially called `reforms’) were introduced. Then it was normally supposed by outside observers that consumption needs would be satisfied through markets.

But in 2004 and early 2005 new data emerged from the ever secretive North. It became clear that the Public Distribution System had not been dismantled. Indeed, it made a moderate comeback, largely due to foreign food aid which was largely channeled through the PDS.

Of course, the PDS does not even remotely reach its earlier ubiquitous levels. According to the FAO, the U.N. food and agriculture agency, in early 2005 the Public Distribution System was “the main source of cereals for the 70 percent of the population living in urban areas.’’ Farmers do not get food from the PDS. During the period November 2003 through October 2004, the average actual allocation through the PDS was about 305 grams, representing about half of a person’s daily needs. According to the World Food Program, in early 2005 rations were cut down to 250 grams per person per day — 40 percent of the internationally recommended minimum.

In October 2005 the North Korean government told its populace that the PDS would be re-started soon. So far, it seems that in Pyongyang the PDS indeed works at the 1990 level, but outside the capital the market remains the only place to find food.

In such a situation, the ability and willingness to engage in private business became a major guarantor of physical survival. A witty local observer described the situation in post-famine North Korea: “Those who could not trade are long dead, and we are only left with survivors hanging around now.’’

The major coping mechanisms are support from relatives in the countryside, wild food collection, and kitchen garden production. According to an FAO survey undertaken in late 2004, 57 percent of the PDS dependent population and “nearly all’’ farmers have kitchen gardens; about 60 to 80 percent of PDS dependents and 65 percent of coop-farmers gather wild foods; and 40 percent of surveyed households receive some support from relatives in the countryside (either as gifts or as part of barter deals).

It is important that farmers are allocated far larger rations, about 219 kilograms of cereals a year or 600 grams a day. They also have larger kitchen plots and can sometimes hide some additional food from hillside cultivation which is less strictly controlled by the state. According to the FAO estimates, kitchen gardens alone give the average farming household some 10 percent of its income.

As has been the case for decades, only a part of rations come as rice. Barley and maize, far less nutritious, comprise a large proportion of cereal consumption. The North Koreans’ approach to maize is clear from the fact that the rice/maize barter ratio is 1/2: for one kilogram of rice one expects to get two kilos of maize, and vice versa. In the period from September 2003 to September 2004 maize accounted for about half of all cereals distributed through the PDS.

But why is the PDS necessary, or why is it not possible to get rid of it altogether? The answer to this question is largely political and, as our readers guess, this will be another story.