North Korean Economy Watch

Martyn Williams has posted the best video of it (with English subtitles):

Here is coverage of the speech in the North Korean media (KCNA):

1. Kim Jong Un Makes New Year Address

2. Kim Jong Un Refers to Achievements Made by DPRK Last Year

3. Kim Jong Un Underlines Need to Consolidate Country’s Might as Socialist Political and Ideological Power

4. Kim Jong Un Calls for Fresh Turn in Building Revolutionary Armed Forces and Enhancing Defence Capability

5. Kim Jong Un Advances Tasks to Effect Upswing in Building Socialist Economic Giant and Civilized Nation

6. Kim Jong Un Set Forth Ways of Carrying out This Year’s Tasks

7. Kim Jong Un Deals with Issue of National Reunification

8. Kim Jong Un Deals with Issue of Foreign Relations

9. New Year Address Having Public Response

10. Workers and Farmers Meet to Vow to Implement Their New Year Tasks

Here is coverage of the speech in the international media:

1. N. Korean leader’s speech ‘meaningful': Seoul (Yonhap)

2. N. Korean leader’s speech arouses cautious optimism (Korea Herald)

3. Kim Jong-un says North Korea is open to ‘highest-level’ talks with South (Guardian)

4. Kim Jong Un Makes Apparent Summit Offer to South Korea (Wall Street Journal)

5. New Year’s Address Reveals a Nervous Leader (Daily NK)

6. Kim’s New Year’s speech reveals economic priorities (Lankov/NK News)

7. Jumping to Conclusions…Again (Klingner/38 North)

8. What’s New in Kim Jong Un’s New Year’s Speech (38 North)

9. Kim Jong Un’s New Year Speech: The Prospects for the 2015 Economic Policy (IFES)

10. Pyongyang’s ‘Year in Review’ Package Emphasizes Kim (Wall Street Journal)

Institute for Far Eastern Studies (IFES)

This year marked the end of a three-year mourning period for Kim Jong Il’s death. To solidify Kim Jong Un’s rule, North Korea is urging for economic advancement and emphasizing economic prosperity and people’s happiness.

The Rodong Sinmun, the mouthpiece of the Workers’ Party of Korea (WPK), increased its economy related news content from December 17. The entire December 22nd edition featured news on economic development: the front page headline read, “Let Us Seize All the Battle Goals of This Year”; news highlighted the achievements of the country’s cement factories, thermal power plants, insulation factories, cooperative farms, mines, and other front-line industries. In addition, pages two and four introduced economic development plans about fisheries and medical supplies. It also featured news touting rural villages’ ability to resolve vegetable shortages by growing vegetables rather than lawn in yards and by planting persimmon trees in villages.

The December 20th edition featured news of Kim Jong Un’s field guidance to Kim Jong Suk Pyongyang Textile Factory — his first since the end of the three-year mourning period for his father. The factory is named after Kim Jong Un’s grandmother and is one of the DPRK’s major textile factories. Kim stressed the problem with production of school uniforms and said, “The Party will fully take charge of the issue of school uniforms, shoes, school supplies, and school bags.”

Prime Minister Pak Pong Ju’s visit to the Orangchon Power Station No. 2 in North Hamgyong Province was also reported. This power station is significant in terms legacy. It began with Kim Il Sung’s order to resolve the power shortage problem in the North Hamgyong region. Power Station No. 1 was completed in 2007 during Kim Jong Il’s era. Power Station No. 2 was completed during Kim Jong Un’s regime.

The reason for the increased emphasis on economic issues is likely the desire to earn public support and improve public sentiment toward Kim Jong Un for resolving the country’s economic problems.

Meanwhile, the Voice of Russia reported that DPRK’s grain production increased this year against the previous year, recording 5.71 million tons. The Russian news agency ITAR-TASS also reported this news, quoting a DPRK official from the Ministry of Procurement and Food Administration: “Despite the drought that we had this year, grain yield increased by 50,000 tons from last year at 5.71 million tons.”

This is the first official report released by DPRK authorities on yearly crop yield. It suggests that North Korea’s good harvest of last year continued with a good harvest this year.

Success in the agricultural sector is likely to lessen the burden of chronic food shortage, and Kim Jong Un’s various agricultural reforms are expected to gather momentum including “Punjo” farming management system, which involves the handing out of small plots of land, or “pojon,” to small sub-groups or sub-workteams, usually comprising a family unit.

According to the Pyongyang Times (2014-12-20):

Nation set to secure enough water for farming

A long spell of severe drought that hit the country this year lowered the water level of reservoirs and reduced water sources for farming.

As part of the ongoing nationwide drive to meet the challenge and secure enough water for farming next year, cooperative farms in North Phyongan and South Hwanghae provinces are stepping up the repair and construction of reservoirs and waterways and their extension.

North Phyongan Province is focusing on the construction of reservoirs together with the reconstruction of Paengma-Cholsan and Amnokgang waterways.

Builders engaged in the reconstruction of Paengma-Cholsan and other waterways already rebuilt the waterway section in charge and are now laying stones over the surface of the banks.

The province is now carrying on the plans to build the reservoir at the Osong Cooperative Farm in Jongju till April and Hwangpho reservoir in Kwaksan County till June next year.

At the same time, it pushes ahead with the repair of 202 dams, about 600 pools, over 1 000 wells, some 90 tube wells and underground reservoirs to collect as much water as possible for the next year’s farming.

North Hwanghae Province is concentrating on the building of pumping stations to do safe farming by pumping up water from the Taedong River together with that of reservoirs.

After setting an ambitious goal to repair dozens of reservoirs, build dozens of more reservoirs, build and extend hundreds of kilometres of more waterways and construct more wells, tube wells and pumping stations on two stages till March next year, it is pushing forward with them in a planned manner.

Builders of Wangdang Reservoir No. 2 in Singye County are building earth dams successfully.

Songnim City is undertaking a project to draw water from the Taedong River into Inpho, Chongun and other ris. Notable achievements have been made in the building of foundations and waterways in a few days since it began.

The construction of pumping stations and waterways is under way in Hwangju County to draw water from the Taedong River into hundreds of hectares of paddy and dry fields of the Sunchon Cooperative Farm which was severely hit by drought this year and in Sariwon to use water of the Jaeryong River on the Migok Cooperative Farm.

According to the Pyongyang Times (2014-12-12):

The agricultural development zone is to be established on Yoltusamcholli Plain, the rice bowl in the west of Korea.

The zone covers an area of nearly three square kilometres in Unjong-ri of Sukchon County, South Phyongan Province in the heart of the plain.

It is envisaged that agricultural research and development bases will be built there in line with the trend of modern farming method as well as food and other processing bases.

The bases will be engaged in R&D for the breeding of good and high-yield varieties of rice, maize, fruit trees and silkworms, for seed selection and for the introduction of the seedling production system and organic farming, and in the production of organic fertilizers and agrochemicals, animal husbandry and processing of environment-friendly foodstuff.

The zone will also establish processing industries that make the most of natural resources and industrial establishments around the area.

The merits of the zone are that the county has skilled agricultural workforce in large numbers, educational and research institutes, favourable topography and the gravity-fed waterway nearby.

In the vicinity of the zone there are also roads linking Pyongyang with local areas including the western border city of Sinuiju, Sukchon Railway Station, Pyongyang International Airport and the country’s biggest trade port of Nampho.

According to the Daily NK:

Market rice prices have been dropping dramatically in recent days, the Daily NK has learned. Given reports of an unfavorable harvest due an absence of fertilizer and drought conditions early in the season, the news has come as a surprise to many residents. In turn, this has led to customary bouts of speculation and rumor.

“The price of rice has plunged to 4,500 KPW [0.54 USD] per kg in the markets,” a source in Pyongyang told the Daily NK on Thursday. “The harvest is underway and freshly harvested rice is pushing down prices.”

“This year, not only collective farms but also individuals planted a lot of rice,” he elaborated. “It seems like the rice from these private plots is now in the marketplace.”

As of mid-October, a kilo of rice was fetching 6,800 KPW [0.82 USD] in public markets, according to research conducted by the Daily NK in locations across North Korea. Later in the month it fell to 5,000 KPW [0.60 USD], and has now reached the 4,500 KPW [0.54 USD] mark.

“Rice is going for roughly 4,800 KPW [1.80 USD], and the price here continues to fall,” a source based in the isolated border city of Hyesan said. “People have been saying the harvest this year has not been that good, but there’s definitely a lot of rice in the markets now.”

The going rate for corn has also fallen in Hyesan, the source explained, dipping to 1,700 KPW [0.20 USD] in early September. The price of corn usually tracks that of rice.

Meanwhile, in Pyongyang residents eager to determine the cause of the sudden drop have been speculating “that rice from Russia has been brought in,” the source revealed. There have even been hard numbers floated in reference to the rumor. To wit, “The state requested 5,000 tons because of the bad harvest.”

The source in Hyesan explained that, as usual, “grain units” have been officially dispatched to oversee the distribution of the harvested rice, but that bribes are sufficient to keep them from regulating rice sold in markets.

The term “grain unit” refers to 20-30 members of the Worker and Peasant Red Guards, one of North Korea’s large reserve military forces consisting of men between the ages of 17 and 60 and some unmarried women, who set up checkpoints along main transportation routes in order to govern the movement of rice and corn harvested on collective farms and individual farm plots. However, this type of monitoring has long been an ineffective formality due to the prevalence of corruption.

Despite the brief spike surmised to stem from these factors, the fall in rice prices is not expected to last long. “There may be a lot of rice in the markets, but the harvest was bad so the supply will gradually decrease,” the source predicted. “Unless the state actively engages with the issue, prices will gradually climb back up to last month’s level.”

There is also the likelihood that vendors with rice in stock may decide not to bring out their supplies if the price stays low, hoping to stick it out and reap higher profits later. According to the source, “If this were to continue, the prices would continue to climb, potentially making things difficult for residents.”

Rice prices in the North tend to be affected by fluctuations in exchange rates, but more recently they have moved seemingly without regard for currency prices. Currently in Yangkang Province, 1 RMB [0.16 USD] trades for 1,350 KPW, a 50 KPW increase from September, yet the price of rice has actually fallen.

Read teh full story here:
Surprise Rice Price Fall on Harvest News
Daily NK
Lee Sang Yong
2014-11-7

Institute for Far Eastern Studies (IFES)

It appears that North Korea has drastically increased Chinese grain imports in the months of July and August compared to the first half of 2014. Up until June, North Korea had imported a total of 58,387 tons of grain from China at nearly 10,000 tons per month. However, in July and August, North Korea imported 19,559 tons and 25,217 tons of grain, respectively. August showed the largest amount of grains imported per month so far this year, and the combined figures of July and August are equal to an astonishing 77 percent of the total amount of grains imported in the first six months of 2014.

The large increase in grain imports beginning in July is interpreted as an early move by North Korea to secure grain supplies for the winter after a double-crop harvest in June which failed to reach expected quantities, and a lackluster fall harvest compared to the previous year.

The grains North Korea has imported so far this year consist of flour (46.6 percent), rice (42.3 percent), and corn (8.9 percent), with flour and rice being the main imports. Compared to 2013, corn imports are down, but have been replaced by an increase in rice imports. Despite the sharp increase in grain imports during recent months, it appears that the overall food situation in North Korea has actually improved. North Korea imported a total of 103,163 tons of grain from January to August of 2014, a mere 59 percent of the 174,020 tons of grain imported during the same time period last year.

Chemical fertilizer imported from China up until August of this year has also decreased by an estimated 37 percent compared to the previous year, from 183,639 tons to 115,337 tons. This decrease in imported fertilizer is thought to be due to improvements made in fertilization equipment, leading to an overall higher rate of operation. It appears that the total amount of fertilizer used by North Korea this year should not differ greatly from the amount used last year, and fertilizer shortage is not expected to cause a major decrease in grain production.

According to Yonhap:

North Korea’s rice production this year is expected to be about the same as last year, a U.N. report said Sunday, reinforcing forecasts that grain production will not fall despite a severe drought in the country.

Rice production this year is estimated at 1.9 million tons, the same level as last year, while maize and pork production are expected to increase slightly to 2.3 million and 114,000 tons, respectively, according to the October edition of Food Outlook, a biannual publication of the U.N. Food and Agriculture Organization (FAO).

In May, the FAO estimated the same production levels for North Korea, with the exception of pork, which was forecast at 113,000 tons.

With this year’s rice production, each North Korean is expected to eat 67.8 kilograms of rice between this fall and next summer, according to the report.

North Korea has long been a recipient of international food aid due to shortages caused by droughts, flooding and poor economic management.

However, the FAO representative in North Korea recently said in an interview that the country is projected to produce 6 million tons of grain this year and attain self-sufficiency in food within three to four years.

You can download the UNFAO report here (PDF).

Read the full story here:
N. Korea’s rice production to remain at same level as last year: U.N. report
Yonhap
2014-10-12

The Hankyoreh reports on some agricultural aid heading to the DPRK:

Picture above via the Hanhyoreh

The article reports:

Trucks carrying materials for greenhouses, fertilized soil and plant seeds for North Korea crosses Unification Bridge in Paju, Gyeonggi Province, Sept. 30. The 200 million won worth of goods were donated by Ace Gyeongnam.

Greenhouses have been constructed all across the DPRK in the last few years.

According to the JoongAng Ilbo:

Twenty container trucks from Ace Gyeongam, a charity foundation fund by bed manufacturer Ace, cross the inter-Korean border yesterday to provide agricultural aid to North Korea. About 200 million won ($190,000) of farming goods will be sent to North Hwanghae Province, marking the first time aid was delivered on a round trip using inland highways between the two Koreas.

Read the full story here:
Aid on the way
JoongAng Ilbo
2014-10-1

The US State Department’s Humanitarian Information Unit put out the following map of hillside farming in the DPRK.

Click image for larger (PDF) version.