North Korean Economy Watch

According to the Daily NK:

Rice prices in North Korean markets have fallen dramatically after the authorities increased levels of food distribution in major urban areas like Pyongyang and Sinuiju, part of state policy of “normalizing” public distribution. Most people are undecided about the policy, but the reality is that grain has been provided by the state both last month and into this, and this is having an effect on market grain prices.

A Pyongyang source told Daily NK on the 21st, “There was five days of distribution in the first part of last month and ten days in the last part, then a further five days at the start of this month, so rice prices fell. The authorities are saying that they are going to give ten days of distribution per month until September, then normalize it completely after that.”

Ten days of distribution at North Korea’s own mandated levels means 4.5kg for workers and a further 2kg for dependent family members.

“When they first heard about [the policy of distribution normalization] they didn’t believe it, but after getting fifteen days distribution last month and another five days this, people are wondering whether this time it could be different,” the source said. “Even last month most people said ‘this will only last for this month,’ but now they have done it this month as well the number of expectant people is rising.”

The source also revealed data on the drop in market grain prices, saying that at one point the price of rice in Pyongyang had declined from 6500-7000won/kg, the approximate price point since the start of the year, to 4500won. “Although it has since climbed back up through the 5000won barrier, it is holding steady,” she added.

However, “From the middle part of April the price started slowly rising again,” she went on, conjecturing, “If distribution is achieved next month as well then it should stay below 6000won, perhaps even staying at around 4000-5000won.”

Aware that Pyongyang is a unique case in the North Korean context, Daily NK has also been checking conditions in other parts of the country, including along the Sino-North Korean border, and has learned that there has been distribution in the North Pyongan Province city of Sinuiju, the Yangkang Province city of Hyesan, and Heoiryeong and Chongjin in North Hamkyung Province, raising the possibility, which sources have echoed, that distribution is occurring nationwide. All the areas checked by Daily NK have also seen rice prices falling sharply thanks to the state distribution.

One Sinuiju-based source explained the situation there, saying, “As far as I know, the official policy of normalizing distribution is not just for our region but all other regions, too. They recently gave us ten days of rice here, so the price in the jangmadang (market) has fallen below 5000won.”

Sources report that between April 14 and 17 the price of rice has fallen to 5400won in Hyesan, 5100won in Hoiryeong, 5200won in Chongjin, and 5000won in Saebyeol County.

A source from Chongjin explained, “On or around April 10th it was selling for 4800won, but has since gone back over 5000won. They have given distribution but exchange rates are not falling, so if distribution ceases at any point, prices will have to rise again.” The same source noted, however, that in Hyesan prices fell, but when the authorities then stopped importing rice from China, they rose again, reaching 6400won. “Rumor has it that they will allow imports again,” the source noted, “but nobody knows when so prices remain high.”

Read the full story here:
Rice Prices Fall on State Distribution
Daily NK
Kim Yong Hun
2013-4-21

Institute for Far Eastern Studies (IFES)
2013-4-18

After Kim Jong Un came to power about a year ago, his main official activities reportedly were focused on the military.  The young leader is said to be looking to consolidate control over the military to strengthen the monolithic leadership system.

Recently, South Korea’s Ministry of Unification (MOU) released a report on the first anniversary of Kim Jong Un’s appointment as the first secretary of the Workers’ Party.  In the report, Kim Jong Un is reported to have made a total of 192 official activities in which 38 percent (73 activities) were focused on the military while political and economy related activities were 23 percent (45) and 20 percent (37), respectively.

Compared to Kim Jong Il’s record of 145 activities in 2011, in which military related events were 39 while economic and political and entertainment performances were 11 and 29, respectively, Kim Jong Un’s activities were focused more on the military.

In addition, a higher number of military elites were seen accompanying the state leader to these military-related events.

The report also stressed the difficulty in assuming that the North Korean economy drastically improved or deteriorated after Kim Jong Un took power.  According to FAO and WFP reports, 2012 to 2013 grain production reached 4.92 million tons, which is an increase of 10.5 percent against the previous year.

This is the third consecutive year where an increase in grain production has been reported; but North Korea still faces a deficit of 210,000 tons, as 5.43 million tons is estimated to be minimum grain requirement (according to FAO) and only 300,000 tons is expected to come in from overseas.  However, MOU authorities explain that regardless of the food supply, distribution difficulties still remain in North Korea.

The exchange rates are reported to have been continuously on the rise from last year.  As of March of this year, 1 USD exchanged for 8,000 KPW and the price of 1 kg of rice was 5,500 KPW.  Considering the average monthly salary of North Korean workers ranges between 3,000 to 4,000 KPW, the food situation for the ordinary people is suspected to still be poor.

The report also did not see any significant signs of changes in North Korean economic policy.  In North Korean leader Kim Jong Un’s New Year message, building a strong economic nation was named as the top agenda for the year, with agricultural and light industries as key sectors. However, the national budget recently released by North Korea’s Supreme People’s Assembly (SPA) revealed a decrease in the budget for agricultural and light industries while the defense budget has increased.

According to Yonhap:

According to the data compiled by the Ministry of Unification and based on information provided by foreign institutions, there were minor improvements in grain production and electricity output, but the difference was minimal and may have actually fueled inequality.

“Personally, I see almost no change from a year earlier,” said a ministry official, who did not want to be identified.

The data was released to the press to coincide with the first anniversary of the North Korean leader having assumed the country’s top job. Kim inherited the communist country after the death of his father in late 2011, but became the first secretary of the Workers’ Party of Korea on April 11 of last year.

North Korea’s food production is estimated to have increased 10.5 percent on-year to 4.92 million tons in the 2012-2013 grain year, the official said, adding that this translates into a shortage of 210,000 tons, down from 300,000 tons from the previous year.

The official, however, said foreign data is based purely on information given by Pyongyang, and is not reliable.

“There may be a need to carefully look at the data on grain,” he said, hinting at the fact that there have been numerous cases over the years where official information was not supported by facts.

On power production, the recent opening of the Huichon power station has increased output by 21.1 billion kilowatts, but the benefits are mostly being felt by the elite in Pyongyang. Outside the capital city, other regions are still affected by power shortages, he claimed.

The official added that while Kim has been calling for the bolstering of its agriculture and light industries, funds earmarked for these sectors grew at a slower pace than the overall growth of the budget.

The 2013 budget grew 5.9 percent from the year before, but funds for the light industry and farming sectors gained 5.1 percent. Defense spending on the other hand gained 16 percent on-year.

The latest data showed that consumer prices have generally been moving up since last year, potentially putting a greater burden on many people whose salaries have not changed in years, the official said.

Read the full story here:
N.K. economy remains unchanged under new leader: data
Yonhap
2013-4-12

Yohnap reports on the UNDP’s 2013 Human Development Report. The report apparently mentions some statistics on the DPRK.  You can read the report here. The interface is awful.

Here is the report from Yonhap (via Global Post):

North Korea saw its forests shrink by nearly 31 percent in the past 20 years, a report by an international organization said Tuesday.

The size of forestlands in North Korea is down 30.9 percent as of 2010, compared to 1990, the 2013 Human Development Report by the United Nations Development Program said. The report ranked about 40 developing countries in terms of human development. It disclosed the North Korean data without including the country in its ranking.

The report also said that as of 2011, 8.6 percent of its animal and plant species are in danger of extinction.

The average life expectancy in North Korea is 69 while an average North Korean woman gives birth to two children in her lifetime as of last year, according to the report.

The average infant mortality rate — the number of babies who die within one year of their birth per 1,000 babies — reached 26 as of 2010 while the corresponding death rate for children under the age of five stood at 44, the report also noted.

A total of 6.6 North Koreans out of 100 used fixed-line or mobile telephone services as of 2010, according to the organization. Recent data from other sources have shown that the country with a population of about 25 million people had 660,000 mobile service subscribers in mid-2010. The number is believed to have soared to 1.5 million in late 2012.

Institute for Far Eastern studies (IFES)
2013-3-14

North Korea is emphasizing the importance of science and technology in the agricultural sector.

The Rodong Sinmun, the official newspaper of the Workers’ Party of Korea (WPK), recently featured an article written by Ri Yong Gu, director of the Ministry of Agriculture, titled “Key Issues to Pay Attention for Introducing Technology Products in Farming Operations.” The article emphasized the importance of science and technology in the WPK’s policies and claimed technology products, such as farm machineries, fertilizer, pesticides, and soil conditioners must be introduced to promote agricultural production.

In addition, the article called for accurate assessment of economic benefits to be gained by introduction of technology products and for evaluation of scientists, technicians, and farmers to mobilize the public and to integrate science and technology with production in all units of the agricultural sector.

Technology products were explained as an important factor for reducing agricultural production costs, making crucial the selection of appropriate technology based on the experience and skill level of farmers and soil conditions of each farm.

Choson Sinbo, the Japan-based pro-North Korean newspaper, featured an article on February 27 that scientific farming methods were incorporated in the Samji River Collaborative Farm that linked with the Center for Agricultural and Technology Dissemination through a computer network.

It is not new for North Korea to emphasize the use of science and technology in agriculture; however, in recent years, more emphasis is being placed on this factor.

In the 2013 New Year’s speech by North Korean leader Kim Jong Un, agricultural and light industries were named as the frontline industries for economic construction. In the speech, Kim stressed that “incorporating science and technology into agricultural production and increasing the level of integration must be accomplished in order to reach wheat production target for this year.”

In time for rice planting season in May, North Korea is hoping to increase fertilizer production and to promote agricultural technology in order to boost production countrywide.

This emphasis is in line with the successful launch of the long-range rocket launch last December, preferential atmosphere toward scientists, and promotion of science and technology in the economic sector.

Increased grain production last year may be due to improved fertilizer supply. Production is expected to improve this year as scientific farming continues to be emphasized.

Institute for Far Eastern Studies (IFES)
2013-3-7

According to Choson Sinbo, the Japan-based pro-North Korean newspaper, on February 22 in Pyongyang, a self-criticism session focusing on socialist competition was held among model collective farms of the “Songun era.” At this meeting, results of agricultural production at these farms were discussed, and the year 2013 was also officially declared as the year for the “December 12 Space Conquest Award.”

The award was created to commemorate the December 2012 launch of the Kwangmyong-3 satellite and to spur production and competition among organizations in various sectors including science and technology and agriculture.

According to an official from the Union of Agricultural Workers of Korea’s Central Committee, this self-criticism session was conducted to negotiate and make overtures to modernize and incorporate science and technology in the agricultural industry.

The main farms competing in the agriculture sector are Samji River Collective Farm (South Hwanghae Province), Migok Collective Farm (North Hwanghae Province), Sinam and Unhung Collective Farms (North Pyongan Province), and Dongbong Collective Farm (South Hamgyong Province). Among these farms, Samji River Collective Farm received awards from the Central Committee of the Workers’ Party of Korea and the Cabinet last year.

The news added, “The competitive self-criticism and evaluation session has provided an understanding that unsuccessful farming cannot be imputed to only poor seed selection or weather conditions. Modernization and reorganization efforts in the farms must be elevated to encourage competition among organizations in order to meet the production goal.”

On the other hand, North Korea has announced a new policy that limits the individual usage of paddy fields (in the mountains) and vegetable gardens from 30 pyong (99 square meters) to 10 pyong (33 square meters), and requires the remaining 20 pyong (66 square meters) of land to be reverted to collective farms. This would seem to go hand in hand with the June 28 economic measures announced in 2012. These recent measures appear to be a state-level effort to improve the production capacities of collective farms by diverting attention from private farming.

Last year, North Korea delivered the new economic management policy measure (June 28 Measures) nationwide to every region and province. On several occasions, North Korea has attempted to enforce similar measures to limit private farming, attributing the poor production of collective farms to private farming. However, faced with backlashes from its residents, food distribution shortages, and the realities of enforcement forced the government to withdraw from such measures.

North Koreans are not allowed to farm on farmland over 30 pyong (99 square meters) in size; however, many are believed to be farming on pieces of land even larger in size. In the farming villages, some people are believed to be farming on 1,500 pyong (4,959 square meters) of land per household, while some are said to be using over 3,000 pyong (9,917 square meters) of land. The grains produced in these farmlands are mostly corns (1 to 1.5 tons) and other crops including beans, cabbages, radishes, sesame, and wheat.

According to the Daily NK:

The North Korean authorities are apparently proposing to reduce the size of hillside plots farmed privately from thirty pyeong down to ten (1 square meter is equal to 0.3025 pyeong), while all remaining acreage is meant to be handed over to existing cooperative farms.

A source from Hoiryeong in North Hamkyung Province told Daily NK on the 29th, “A cadre from the county Party Committee just told a packed meeting of the Union of Democratic Women that ‘the policy is that from this year all private plots of land are to be limited to ten pyeong, and the other twenty will be taken away and assigned to cooperative farms. That which is in the mountains will be used for planting trees’.”

The source continued, “We must also pay fifty won per pyeong in order to farm the ten pyeong that is allowed, and there will be severe penalties for transgressors,” before reiterating a common refrain in conversation with North Korean civilians: “The rations only last for three to four months anyway, so people have to live off their plots of land. Taking away their land is the same as taking away their food.”

From a state policy perspective, the step appears designed to refocus energies on cooperative farming activities, in the hope that this will increase the productive capacity of the official farming sector in an effort to attain the sort of production levels required for the implementation of the June 28th Policy of farming reforms announced domestically in July 2012. However, it is thought unlikely that this will come about, and, conversely, the source predicted that the measure, if widely implemented, would have a detrimental effect on overall output and decrease the amounts of grain entering markets.

Partly this is because, while people are not technically meant to hold more than 30 pyeong of private land, in reality many are cultivating more even than this; in many cases, more even than their formal work unit is responsible for. This is because only by farming soybeans, cabbage, radish and other agricultural goods are many able to eek out a secure living.

Read the full story here:
Farmers in a Muddle over Private Land Order
Daily NK
Kim Kwang-jin
2013-1-30

Pictured Above: The Orang Odaejin Fisheries Office

According to the Daily NK:

Daily NK has learned that approximately 30 North Korean squid fishing vessels from ports in the provinces of North and South Hamkyung have been lost at sea this year alone, causing more than 120 casualties.

A source from North Hamkyung Province revealed the news to Daily NK on the 18th, explaining that the information came from the ‘2012 Missing Vessels Report,’ a booklet of statistical data compiled by the regional coast guard.

According to the source, the report noted, “Among all the vessels that have engaged in squid fishing this year, more than 30 smaller vessels have been lost, and 122 crew members have been killed or reported missing.”

It is mandatory for fishing vessels to register a crew list before leaving port each day for security reasons. Those vessels that leave port but do not return are classified as lost.

The sea near the Hamkyung port of Odaejin in Eorang County has traditionally been the most popular on the North Korean East Sea coast for squid fishing. However, Jang Keum Chun, who previously operated a shipping company in the Liaoning Province city of Dalian, has had a number of boats in the area since 2007.

This is because Jang is the son of Jang Wool Hwa, who sided with Kim Il Sung during the fight for liberation from Japanese rule. As such, he is said to have received direct permission from Kim Jong Il to begin fishing in the area.

The local fishermen who had been fishing for squid in the region for generations have been progressively forced further and further out by this (plus declining squid stocks throughout the East Sea region), which has put many in grave danger.

The source said, “North Korean fishing vessels only have about 6 to 8Hp, so are easily swayed by strong winds and waves.” When vessels run into trouble, there is little hope of rescue due to inadequate communications equipment and rescue vessels.

North Korea has reportedly been suffering 100 or more casualties in fishing accidents in the region for a number of years.

Read the full story here:
122 Casualties in Race for Squid
Daily NK
Choi Song Min
2012-12-18

An FAO/WFP Crop and Food Security Assessment Mission (CFSAM) visited the DPRK from 2012-9-24 to 2012-10-18 (25 days). They assessed the 2012 main crop harvest; forecasted the 2013 production of winter and spring crop; estimated cereal import requirements for the 2012/13 marketing year (November/October); assessed the household food-security situation and estimated food assistance needs.

Read the full report here (PDF).

It is full of data/statistics and well worth reading. You can find even more information on my DPRK Economic Statistics Page.

Here is media coverage of the report: Associated Press 1, Associated Press 2, Yonhap 1, Yonhap 2.

According to the Daily NK:

The price of rice apppears to be stabilizing in North Korea as the end of the autumn harvest brings corn to market. However, this year’s corn crop is known to have been below average, suggesting that the current improvement might not last.

According to a source from Shinuiju in North Pyongan Province, “The price has been falling steadily of late, and is currently 5,500won per kilo.” Corn is currently 2,000won/kg, the same source added. Meanwhile, a source in Hyesan reported that the price of a kilo of rice in the jangmadang there is currently 6000won.

The news means that prices have declined by between 200 and 600won since October 23rd in the two cities surveyed. This is the first rice price decline of more than 500won anywhere in North Korea since the start of the year. Indeed, the trend was inexorably upward for much of 2012; rising from 3,500won in January to 7,000won by October.

The Shinuiju source went on to explain the reason for the change, saying, “Corn, which is a substitute for rice, has entered the market, easing prices and improving people’s food supply. This has meant that rice prices stabilized. With all this talk of reform and opening measures there has been a lot of anxiety and prices everywhere were up around 7,000won at one point. This caused a lot of resentment, but some of that has been relieved now.”

The clearest sign that the current price decline is down to the arrival of domestic corn is that the Chinese Yuan to North Korean Won exchange rate has not moved even as the price of rice has fallen. As the Shinuiju source noted, “This current situation is not really sustainable, so the money changers have not moved at all. They are not going to release more Yuan into the market.”

Read the full story here:
Corn Crashes Rice Price Party at Last
Daily NK
Lee Sang Yong
2012-10-31