Archive for January, 2011

Witness to Transformation: Refugee Insights into North Korea

Monday, January 31st, 2011

I was in Washington today for the release of Haggard’s and Noland’s new book Witness to Transformation: Refugee Insights into North Korea. According to the Peterson Institute’s web page:

Despite its nuclear capability, in certain respects North Korea resembles a failed state sitting uneasily atop a shifting internal foundation. This instability is due in part to the devastating famine of the 1990s and the state’s inability to fulfill the economic obligations that it had assumed, forcing institutions, enterprises, and households to cope with the ensuing challenges of maintaining stability with limited cooperation between the Korean government and the international community. The ineffective response to the humanitarian crisis triggered by the famine resulted in the outflow of perhaps tens of thousands of refugees whose narratives are largely overlooked in evaluating the efficacy of the humanitarian aid program. Witness to Transformation: Refugee Insights into North Korea uses extensive surveys with refugees who now reside in China or South Korea to provide extraordinary insight into the changing pathways to power, wealth, and status within North Korea. These refugee testimonies provide an invaluable interpretation of the regime, its motivations, and its capabilities and assess the situation on the ground with the rise of inequality, corruption, and disaffection in the decade since the famine. Through the lens of these surveys, preeminent North Korean experts Stephan Haggard and Marcus Noland carefully document the country’s transition from a centrally planned economy to a highly distorted market economy, characterized by endemic corruption and widening inequality. The authors chart refugees’ reactions to the current conditions and consider the disparity between the perceived and real benefit of the international humanitarian aid program experienced by this displaced population. Finally, the book examines these refugees’ future prospects for integration into a new society.

I have read the book and found it tremendously helpful for understanding the changing dynamics within the DPRK.

In conjunction with the release of the book, the two authors have launched a new blog.  You can see it here. They have already posted some fantastic data—and we can also see a sense of humor as well!


1. Here is a link to the presentation given at the event.

2. Here is coverage in the Daily NK.

3. Here is coverage in the AFP.


DPRK food prices drop

Monday, January 31st, 2011

According to the Choson Ilbo:

The price of rice and foreign currency exchange rate in North Korea have both dropped drastically in a matter of a week, according to Radio Free Asia.

The radio station reported Saturday that rice in Hyesan, Yanggang Province was selling for 2,000 won per kg as of Friday, down from 3,300 won or nearly 40 percent from six days earlier. The Chinese yuan was trading for 400 North Korean won, down from 520.

A local source said that various rumors had prompted merchants to stockpile rice and then suddenly release it. The source also added that the rice requisitioned for the military, a key cause of recent price increases, is being siphoned off and sold, bringing the price down.

Read the full story here:
Rice Prices in N.Korea Plunge 40%
Choson Ilbo


Lankov on the state of the North Korean economy

Monday, January 31st, 2011

Andrei Lankov writes in the Korea Times about the state of the North Korean economy.  Excerpt below:

The existing statistics are remarkably untrustworthy, being essentially educated guesses by analysts. Nonetheless, these statistics indicate a moderate growth of the North Korean economy.

But the present author talks to North Koreans quite frequently. So I don’t need statistics to confirm what becomes clear from my talks with refugees, smugglers, migrant workers and those Koreans who have illegal Chinese mobile phones. Throughout the last ten years the economic situation in the country has improved, even though this improvement was very moderate.

What does “improvement” in this context exactly mean? First of all, few if any North Koreans now face the threat of starvation, though malnourishment remains a widespread problem. Many (perhaps, a majority) of North Koreans don’t have enough to eat in spring. This has a seriously negative impact on their health and is especially bad for children. Nonetheless, unlike the 1990s, it seldom leads to death.

The average North Korean meal is a bowl of boiled corn with a few pickles. Meat or fish are eaten only on special occasions or by affluent people.

Indeed the last decade was a time when material inequality increased in leaps and bounds. Some of the new rich are officials who take advantage of their positions while others are successful entrepreneurs running all kinds of private businesses.

A successful North Korean entrepreneur nowadays might even openly own a car. For instance in a relatively small borderland city with a population of some 90,000 people there are officially three private cars. Much more frequently well-to-do North Koreans prefer to register their cars with state agencies. At any rate, ten years ago a private car was almost unthinkable.

The less successful entrepreneurs or craftsmen are still doing quite well as indicated by significant increase in the number of consumer durables owned by North Koreans. Fifteen years ago a fridge was a sign of exceptional luxury, almost as rare as a private jet in the U.S. Now it’s a bit like a luxury car, an item that 10-20 percent of households can afford.

What is also interesting is the spread of computers, including privately owned ones. In most cases these are old, used computers which are imported or smuggled from China. They are quite outdated but they are computers nonetheless. Recently I interviewed a group of school teachers from the countryside, and they said that nowadays every high school, even in remote parts of the country, is likely to have at least one computer (admittedly, this wonderful contraption is seldom switched on).

This does not mean of course that North Korea has become a consumer paradise. In spite of some improvements, the gap between the North and its successful neighbors continues to widen. However in absolute terms the North Korean economy is not shrinking any more.

There have been serious setbacks, the currency reform early last year is a perfect example. For a while, this failure almost paralyzed the economy and created serious food shortages across the country.

But what brought about this moderate growth? It seems that there are three major contributing factors.

First, North Korea has been quite good at begging and blackmailing the outside world into providing aid. The aid was initially provided by South Korea and the U.S., but now it comes almost exclusively from China.

Second, North Korea’s technocrats have learned how to run the country in its new situation. They are not very efficient at this, but, to quote Marcus Noland, “they are muddling through.”

The present author is inclined to believe that it is the third reason which is the most important of all. Over the last decade a relatively powerful private economy has developed in North Korea. North Koreans did not merely learn how to trade privately, they now produce privately as well and this growth of industry invisibly and privately, seems to have contributed to the growth described above.

The growth is moderate, and no breakthrough is likely. Nonetheless, it is real and palpable.

Read the full story here:
Between myths and facts
Korea Times
Andrei Lankov


Somali pirates holding DPRK ship

Monday, January 31st, 2011

According to the Korea Times:

Radio Free Asia (RFA) of the United States reported Friday that a North Korean ship has been detained for the 10th consecutive month by Somali pirates.

“The Chilsanbong Cheonnyeonho of the North was hijacked near Somali waters on March 31 last year and has since been detained,” the Washington-based shortwave radio reported, quoting a report on ships taken by pirates in 2010 published by the International Maritime Bureau (IMB). “Nine sailors suffered wounds from armed pirates, while resisting their attack.”

Another North Korean freighter, Limho, was hijacked on its voyage through the Bay of Aden on Feb. 3 last year and was released after four months of negotiations, according to the report.

A total of nine North Korean merchant ships were captured or attacked by pirates since 2006 _ one each in 2006 and 2008, five in 2008 and two in 2010.

During the same period, as many as 12 South Korean ships suffered similar fates _ four in 2006, three in 2008, one in 2009 and four in 2010.

“Close international cooperation is urgently needed to cope with growing damage from pirates,” said RFA. “However, North Korea, which joined the International Maritime Organization (IMO) in 1986, has failed to pay annual fees of 30,000 euros since 2009, saying, ‘It is hard to actively work due to a change of diplomats at the embassy.’”

Links to previous Somali pirate stories here.

Read the full story here:
‘N. Korean ship detained for 10 months by Somali pirates’
Korea Times


ROK to set public sector employment quota for DPRK defectors

Monday, January 31st, 2011

According to the Choson Ilbo:

The government will set a 1-percent quota for North Korean defectors in administrative assistant jobs at public agencies, it said Thursday. The government made the decision on the assumption that about 3,000 North Koreans arrive in South Korea on average every year who have a hard time adapting to their new environment partly due to difficulties finding jobs.

Some 200 North Korean defectors are expected to be employed as administrative assistants this year, given that the total hired by the central and local governments is about 20,000 annually.

A Ministry of Public Administration and Security spokesman said the government “decided to take the lead in hiring North Korean defectors to raise awareness of them and encourage private companies to follow suit.”

The ministry plans to ask former and current public servants to serve as mentors for defectors and give them a training course through which they can develop their skills.

According to the ministry, the total number of defectors stood at 7,687 in 2005 and is expected to exceed the 30,000 mark in 2013.

Read the full story here:
1% of Public-Sector Jobs to Go to N.Korean Defectors
Choson Ilbo


Kim Jong-il does not really support hereditary succession?

Monday, January 31st, 2011

This weekend a Japanese newspaper published an interview with Kim Jong-nam, Kim Jong-il’s eldest son, living in Macao.

Kim Jong-nam claims that his father is actually opposed to hereditary succession in the DPRK but is forced to promote it because there is no other political institution that can guarantee “stability” of the both DPRK’s incumbent interest groups and North-East Asia’s political balance.

Kim Jong-nam also refuted claims that his life was at risk; commented on the shelling of Yonpyong; called the recent currency re-nomination a failure; and endorsed economic liberalization in the DPRK.

Kim Jong-nam ‘s comments were widely reported in English.  You can read more below:

N. Korean leader opposed hereditary power transfer, eldest son says

Kim Jong-Il opposed succession: eldest son

Kim Jong Il Was Against Succession
Daily NK
Chris Green



US and DPRK begin another round of food diplomacy

Monday, January 31st, 2011

UPDATE 3: The JoongAng Daily (2/12/2011) reports on comments made by Robert King:

King explained that in the past, the U.S. had agreed to give North Korea 500,000 tons in food aid, but was only able to give 170,000 tons as North Korea refused the rest and ordered foreigners who had entered North Korea to deliver the aid to leave.

The envoy also said that it has not yet been decided whether the U.S. will grant food aid to the North and that three prerequisites must be fulfilled if it does.

The three conditions, he explained, are whether a real demand for food truly exists in North Korea, whether the North’s need for food is on the same level as other countries in need of aid, and whether monitoring of the aid will be securely guaranteed. Only when these three prerequisites are met can the U.S. grant aid, King said.

UPDATE 2: According to the JoongAng Daily (2/9/2011) the North Koreans have made an official request for food aid to the US government:

North Korean deputy ambassador to the UN, Han Sang-ryol, requested U.S. food aid last month through Robert King, the U.S. special envoy for North Korean human rights, a diplomatic source told the JoongAng Ilbo yesterday.

Local analysts suspect that King, who is currently in Seoul, informed the South Korean government of the request and is discussing a joint response to it.

“Ambassador Han met King in New York on Jan. 14 and requested large-scale U.S. food aid for the North,” said the diplomatic source in Washington.

It is the first time in years that a behind-the-scenes diplomatic discussion between Pyongyang and Washington on aid has come to the surface. U.S. food aid to the North has been suspended since March 2009 after the Kim Jong-il regime rejected a U.S. proposal to increase the number of Korean-speaking food-distribution monitors to make sure aid was getting to the public.

Han told King that the North was willing to enhance international monitoring of food aid “as much as the U.S. wants,” the source said.

King, who came to Seoul on Sunday, started meetings with Seoul officials yesterday, including Wi Sung-lac, the top envoy on North Korean nuclear issues. At a brief media conference after the meeting with Wi, King did not elaborate on the purpose of his visit or his discussion with the South Korean envoy, saying only it was “very good, very serious and a very thoughtful discussion.”

When asked whether food assistance to the North was on the agenda, King said they “talked about a lot of issues.”

“[It is] extremely important for the U.S., as we pursue our policies toward North Korea, to coordinate with the government of South Korea,” King said. “We have a close working relationship, we are able to work together well on issues, we share our analysis, we share our ideas in terms of making progress.”

The official United States stance, as U.S. Assistant Secretary of State Kurt Campbell said earlier this month, is that it does not have a plan to resume food aid to the North for now.

“The U.S. does not think the North has met conditions to get U.S. food aid,” the source said.

And even if Washington decides to resume aid, it will take time because of congressional procedures, the source said. But some analysts see the possibility of change, citing some opinions in the U.S. State Department in favor of engaging the North with aid to sway its attitude on other issues, including denuclearization.

UPDATE 1: According to the Donga Ilbo (2/6/2011):

The U.S.-based Radio Free Asia says the U.S. government and nongovernmental organizations are discussing the resumption of food aid to North Korea.

Quoting diplomatic sources in the U.S., the broadcaster said Washington has not decided to resume food aid to Pyongyang but is having many talks and discussions on the issue.

Voice of America said Friday that the World Food Program and the U.N. Food and Agriculture Organization, both of which are under U.S. influence, also plan an additional survey of the North`s food situation for about a month from Feb. 10.

In an interview, Dr. Kisan Gunjal of the food organization said he will survey the North’s food security and crop situations from Feb. 10 to March 12 at Pyongyang’s official invitation.

In a phone interview with The Dong-A Ilbo, an official at a South Korean aid group said, “The U.S. has asked South Korean non-governmental organizations about North Korea’s crop and food supply situations in 2011 since the North’s artillery provocation on Yeonpyeong Island in November.”

Washington, however, remains officially cautious. U.S. State Department spokesman Philip Crowley told a news briefing Monday that the U.S. government has no immediate plans to provide humanitarian aid to the North.

ORIGINAL POST: According to the Donga Ilbo (1/31/2011) the US and DPRK are talking food aid once more:

The U.S. and North Korea have begun their third round of food diplomacy, with Washington considering resuming food aid to Pyongyang.

The U.S. has halted food aid to the North twice since its first provision in 1996 after blaming Pyongyang for diverting the aid.

The North has always asked for food aid first since North Korean leader Kim Jong Il confronted a series of crises in the early 1990s, when the former Soviet Union and China stopped economic assistance to the Stalinist country.

His father and the North`s founder Kim Il Sung died in 1994. When the North was devastated by floods and other natural disasters nationwide, Kim Jong Il ordered state cadres to beg the U.S. for help.

The North Korean Foreign Ministry then formed a committee for flood damage and went hat in hand to Washington. The Clinton administration provided 19,500 tons of food through the World Food Program in 1996, expecting the North to implement the 1994 Agreed Framework and be docile in talks for the repatriation of remains of American soldiers killed in action in the Korean War.

Washington increased its food aid from 177,000 tons in 1997 to 695,000 tons in 1999. In 2000, a joint communiqué between the North and the U.S. was signed.

North Korea, however, diverted the food aid in ignoring U.S. and international principles for humanitarian aid.

As public opinion in the U.S. worsened over the assistance, the George W. Bush administration slashed the aid volume from 350,000 tons in 2001 to 40,000 tons in 2003. The U.S. Congress demanded greater transparency in the distribution of the food aid in 2004, when it passed the North Korean Human Rights Act.

Rejecting the demand, Pyongyang expelled World Food Program staff in 2005. Washington opted not to provide food aid to Pyongyang in 2006.

Flexing its muscles in November 2006 by conducting its first nuclear test, North Korea again requested U.S. aid in 2008. The Bush administration, which was nearing the end of its term, chose to sit at the negotiating table with the North and offered 500,000 tons of food aid through the World Food Program.

The North received 169,000 tons of food by expanding the areas where food distribution is monitored and agreeing to allow more Korean-speaking monitoring personnel.

In early 2009, Pyongyang decided to test the newly inaugurated Obama administration by launching a long-range rocket and preparing for a second nuclear test. In March that year, the North expelled humanitarian aid groups, saying it would not be able to keep its promise of distribution transparency.

In fall last year, North Korea unveiled its uranium enrichment program and showed its centrifuges to the U.S. in a virtual threat to conduct its third nuclear test with uranium bombs if Washington failed to provide food.

What the U.S. will eventually do is attracting interest since South Korea is opposed to aid to the North.

Read the full stories below:
Pyongyang asks U.S. to restore food aid: source
JoongAng Daily
Kim Jung-wook, Moon Gwang-lip

US, N. Korea begin 3rd round of food diplomacy
Donga Ilbo

Radio Free Asia: US, NGOs discussing food aid to NK
Donga Ilbo


“Model” Kim Chaek Complex in Dire Straits

Monday, January 31st, 2011

According to the Daily NK:

Kim Chaek Iron and Steel Complex is unable to operate properly due to shortages of materials and fuel, according to sources. The Complex is North Korea’s main producer of “Juche steel”, treated as an economic symbol of self-revitalization and mentioned in this year’s Common Editorial.

Additionally, since the dire state of Kim Chaek Iron and Steel Complex has an influence over other related enterprises and factories in the region, the entire economy of Chongjin is reportedly in substantial difficulties.

A source from Chongjin reported today, “Almost every factory and enterprise in Chongjin is in hibernation. Even Kim Chaek Iron and Steel Complex and Chongjin Steel Mill, both of which had been running to some extent, cannot play their proper roles and are frozen.”

The Kim Chaek Iron and Steel Complex, employing 25,000 workers, is where “Juche steel” is produced with high energy anthracite instead of imported crude oil and coke, hence its being a symbol of the Juche idea. The nearby Chongjin Steel Mill employs approximately another 8,000 people.

The North Korean authorities stress that the Complex is a model factory. Therefore, as the New Year’s Common Editorial is released annually, so Rodong Shinmun releases “The Kim Chaek Complex Letter” to encourage production increases at every factory in the country.

However, the reality is that operations at the Kim Chaek Complex have dropped to less than 50 percent of last year’s, according to the source, while the Chongjin Steel Mill is operating at around 30 percent. This is because they have not been able to procure materials and fuel due to the economic crisis.

The source explained, “Even when smoke is coming from all six chimneys in the sintering factory, it is not enough for the main blast furnace, and even when the Party urges them on, there are not enough materials for half the furnace capacity.” He went one, “That much is only possible because cadres from the central and provincial committees have been dispatched to the spot.”

According to the source, the sintering section of the complex produces sintered materials mixed with iron ore, lime and coke; the core materials of “Juche” steel.

He added, “When workers see smoking chimneys at the Complex in the morning, they are relieved, because the factories frequently stop working altogether.”

“As long as the sintering furnace is working, the main furnace is also running, and the steel factory and rolling factory also work,” he explained, adding, “Therefore, when they find chimneys at the sintering factory without smoke, citizens sigh that ‘The furnace died again’.”

The current freezing weather and lack of electricity are other decisive elements in production difficulties.

The source said, “The ore pipeline from Musan is now frozen solid, so supplies of ore cannot be carried here in time. They carry them by train, but due to frequent blackouts only a few freight cars can move. So people complain ‘How can we feed the furnace with that?’”

In this situation, related enterprises and factories have also been suspended and, accordingly, all economic activities have shrunk.

The source said, “When the Complex runs, some food, oil, sugar and soap can be supplied to workers, markets in the vicinity can be activated, and this influences Chongjin downtown markets.” In short, due to the suspension of the operation in the Complex, workers’ lives have grown worse.

Another source noted, “Last month, the furnace (2,000 workers), sintering section (1,500), and coking (1,000), provided workers with a little bit of food, so workers from other sections envied them. But this month the situation for all sections is the same; poor.”

Since the Kim Chaek Complex is treated centrally as a symbol of the North Korean economy, its production rate implies that the overall economic situation in North Korea continues to decline.

Read the full story here:
“Model” Kim Chaek Complex in Dire Straits
Daily NK
Im Jeong Jin


Weekend fun: Iron Facebook curtain, DPRK at night, Photoshop fun

Friday, January 28th, 2011

Three sets of pictures related to the DPRK:

Iron Facebook CurtainThe first image obtained via Aid Watch presents a December 2010 map of Facebook connections.  Notice anyone missing?  (Egypt is there!)

You can see a high resolution version of this image here.

DPRK at night and economic growthThe second image obtained from Aid Watch compares growth in electricity coverage at night between the two Koreas.  This is the first image I have seen like this which makes side-by-side comparisons:

Click image for larger version

I overlaid these images to Google Earth to determine areas of relative growth and decline.  Surprisingly, Pyongyang and Chongjin showed dimmer and smaller electricity signals, indicating lighting was more prolific in 1992 than in 2008.  I would have expected their electricity signals to be just as, if not more, pronounced in 2008.

The areas of growth, where electricity signals are more (modestly) pronounced, include Kaesong (개성), Huichon (희천), Songgan (성간), Thaechon (태천), and Anju (안주).  Most of these are somewhat expected since they have received much publicized foreign (Kaesong) and domestic investment, particularly in power station development.

Also worth noting are the growth of lighting in South Korea and China.

Photoshop Fun: The third set of interesting images come from a Chinese reader who sends along these images from Korea magazine,  the monthly picture magazine published by the DPRK (See e-version here).  The images have been altered to give the impression of plenty.  Below see images of photoshopped goats, swimmers, and bread:


Noland on DPRK grain prices

Friday, January 28th, 2011

According to the new Noland/Haggard blog:

The two panels below report data on prices for rice and corn. The charts indicate that prices have risen to roughly 35-40 percent of their pre-reform trend line, suggesting that excess growth in the money supply has undone a significant share of the reform. And grain price inflation has accelerated significantly, from an annual rate of 35-40 percent before the reform, to 500-600 percent over the past year.

Admittedly grain prices are rising worldwide, so the observed increase in grain prices may contain an element of relative price increase, but if food prices are interpreted as a proxy for the overall price level, these data suggest a rapidly growing money supply and accelerating inflation in North Korea.