North Korean Economy Watch

According to the Daily NK:

This year, the North Korean authorities are once again emphasizing the need to strive for greater food production as the farming season begins, launching the annual 40-day total farm mobilization period with the words “Let’s mobilize the whole party, the whole nation and all the people to reach the grain production targets.”

Rodong Shinmun published editorials on the subject on both the 11th and again on the 12th, reflecting the emphasis being optimistically placed on solving food security issues in 2012. Kim Jong Eun also emphasized the same in his major statements on the 6th and 27th of last month, understandably so given that farm productivity has the potential to play such a decisive role in stabilizing the first full winter of his rule.

Inside sources say that the mobilization atmosphere is unusually intense this year in farming villages. Cadres and people alike are feeling the strain of Kim Jong Eun’s first season in charge, with the assumption being that this year could see severe punishments meted out for any wrongdoing.

A South Hamkyung Province explained to Daily NK yesterday, “The whole nation is out there supporting the farms, including enterprises affiliated with state agencies, upper middle school and college students and military bases. People are not allowed to be at home or in the streets. Restaurants are not open either. Everybody is out on the farms. It’s just like martial law, really brutal.”

“5 or 6 safety agents have set up a desk in the street and are stopping people passing by, confiscating their identifications and the bikes they are on and sending them to nearby farms,” he went on. “People can only pass if they have a confirmation slip from a cooperative farm management committee.”

“The markets are only allowed to open from 5PM to 8PM after farm work is done for the day, so excluding preparation and organizing time, there is only an hour or so that the market is open. Buyers and sellers are all super busy,” he added.

During the 40-day total mobilization period, school classes are halted and students sent off to farms for forty days carrying their food and bedding. Laborers, workers in administrative organs and members of the Union of Democratic Women all commute from home to local collective farms until the planting and seeding is done.

North Korea has had the policy in place since 2006. Prior to that, students still had to farm every day, but full-time workers and members of the Union of Democratic Women went out just twice or three times a month.

In 2006, five provincial Party cadres from North Hamkyung Province were caught enjoying a spa during the period. They were summarily kicked out of the Party and sent into internal exile with their families.

“Until last year we were able to get confirmation of attendance from farm management committee cadres by giving a bribe, but with this year being the first under Kim Jong Eun, those tricks are unlikely to work,” the source concluded.

Read full story here:

Farming Regions in State of Tension
Daily NK
Choi Song Min
2012-5-15

According to Yonhap:

A U.N. food agency has estimated that North Korea will secure 2 million tons of rice in 2012, up about 18 percent from last year, a news report said Wednesday.

The Food and Agriculture Organization (FAO) said that the North produced 1.6 million tons of rice last fall and is expected to import 300,000 tons of rice and receive 100,000 tons of outside assistance, Washington-based Radio Free Asia reported, citing the FAO’s food outlook.

The Rome-based U.N. agency also estimated that North Korea’s per capita rice consumption is expected to increase to 72.3 kilograms between last year’s fall and summer of this year, up from 64 kilograms in the same period last year, the RFA said.

In February, the FAO said more than 3 million vulnerable people are estimated to face a food deficit as chronic food insecurity continues throughout North Korea.

The North has relied on international handouts since the late 1990s when it suffered a massive famine that was estimated to have killed 2 million people.

Marcus Noland has a piece here on global food prices.

Read the full story here:
U.N. estimates N. Korea to secure 2 million tons of rice this year
Yonhap
2012-5-9

UPDATE 2 (2013-9-10): According to Yonhap:

A speech made by North Korea’s young leader Kim Jong-un last year that detailed his plan on land management has been published in Chinese, a state media report said Tuesday, in what is believed to be his first Chinese-language publication.

The Chinese-version of Kim’s speech, titled “On Brining About a Revolutionary Turnabout in National Land Management Work to Meet the Demand of Building a Powerful Socialist State,” was published on Sept. 3 in Dandong, China’s border city with North Korea, China News Service reported.

According to the report, the speech by Kim was published by a Chinese printing firm named “Longshan,” but it did not give other information, including the name of its publisher or whether the publication is being sold.

Kim, who took power in late 2011 following the death of his father, Kim Jong-il, made the speech on April 27 of last year, while convening a meeting of key members of the North’s Workers’ Party of Korea and economic organizations.

During the April 27 meeting, Kim said, “Land management is a patriotic work for the eternal prosperity of the country, and a noble work for providing the people with better living conditions,” according to a report by the North’s state media at the time.

Kim also ordered officials to improve water management, including the improvement of rivers and streams as well as dams, lock gates and “gravity-fed waterways and irrigation channels.”

Read the full story here:
N. Korean leader’s plan on land management published in Chinese
Yonhap
2013-9-10

UPDATE 1 (2012-11-19): Aidan Foster-Carter has sent me a Naenara link to Kim Jong-un’s full remarks (published in English).

I have put the entire speech into a PDF which you can view here.

ORIGINAL POST (2012-5-8): On 2012-5-8 KCNA posted two articles citing a publication by Kim Jong-un on “land management”. The paper, titled “On Effecting a Drastic Turn in Land Management to Meet the Requirements for Building a Thriving Socialist Nation”, was not posted but will no doubt be offered for sale to Pyongyang tourists before too long. However until I receive a copy, the two KCNA articles below will have to do:

(more…)

According to Yonhap:

President Lee Myung-bak on Friday urged North Korean leader Kim Jong-un to give up the collective farm system and privatize state-owned agricultural land to help enrich the North and its residents.

…

“North Korea should abandon its collective farm system and shift to the privatization of agricultural land. If so, rice will be abundant in two to three years. Farmland privatization will help individuals earn more and the state increase revenues,” Lee was quoted by his spokesman Park Jeong-ha as saying in the lecture.

“(Farmland reform) is a must for North Korea. All the young leader has to do is the (reform). It is the most urgent matter and has to precede its market opening. Continued dependence on aid will only produce beggars.”

President Lee’s statement stresses the short-term economic benefits of moving away from collective farming: More food, higher incomes to farmers, improved fiscal position, and thus, increased political legitimacy for the Kim Jong-un government. However, from a political and strategic viewpoint he is probably hoping that North Korean agricultural reform will pave the way for broader economic reforms — as was the case in China. However, it is worth noting that China’s agricultural reforms, which ended the misery of the Great Leap Forward and laid the foundation for broader economic reforms, were not created in Beijing.  They were developed and implemented by a single village of scared, hungry farmers:

Pictured above (via Marginal Revolution): Farmers from 18 households in Xiaogang village (Fenyang County, Anhui Province) signed this contract bringing a de facto (not de jure) end to collective farming.

Economists Tyler Cowen and Alex Tabarrok said the following of the Xiaogang Contract:

The Great Leap Forward was a great leap backward – agricultural land was less productive in 1978 than it had been in 1949 when the communists took over. In 1978, however, farmers in the village of Xiaogang held a secret meeting. The farmers agreed to divide the communal land and assign it to individuals – each farmer had to produce a quota for the government but anything he or she produced in excess of the quota they would keep. The agreement violated government policy and as a result the farmers also pledged that if any of them were to be killed or jailed the others would raise his or her children until the age of 18.

The change from collective property rights to something closer to private property rights had an immediate effect, investment, work effort and productivity increased. “You can’t be lazy when you work for your family and yourself,” said one of the farmers.

Word of the secret agreement leaked out and local bureaucrats cut off Xiaogang from fertilizer, seeds and pesticides. But amazingly, before Xiaogang could be stopped, farmers in other villages also began to abandon collective property. In Beijing, Mao Zedong was dead and a new set of rulers, seeing the productivity improvements, decided to let the experiment proceed.

The rapid increase in China-DPRK trade and information exchanges raises the question of just how many North Koreans have heard of the Xiaogang contract or how many villages have implemented similar measures?

For its part, the Workers Party has employed a mixture of both top-down agricultural policies and accommodation of bottom-up economic innovations to increase food availability. From a top-down perspective, the DPRK has promoted “technological inputs” (fertilizer production, terraced hillsides, large irrigation projects, land reclamation, land rezoning, new foodstuff factories, improved management techniques, CNC) and multilateral aid outreach (official and private food aid from abroad). From a bottom-up perspective, the DPRK has offered and expanded economic incentives (kitchen/private plots, farmers’ markets, general markets, July 2002 Measures, 8.3 Measures, accommodation of some illegal activity,  family-based work team units on collective farms).  The combination of all these efforts, however, has obviously not resulted in food security–for a number of reasons that are too  lengthy for a simple blog post.

If you are interested in learning more about the DPRK’s agricultural policies, I have posted below some papers (PDF) covering different stages in the North Korean agriculture sector: Pre-war, post war (collectivization), and post famine (arduous march). They are all well worth reading:

1. Lee Chong-Sik, “Land Reform, Collectivisation and the Peasants in North Korea”, The China Quarterly, No. 14 (Apr. – Jun., 1963), pp. 65-81

2. Yoon T. Kuark, “North Korea’s Agricultural Development during the Post-War Period”, The China Quarterly, No. 14 (Apr. – Jun., 1963), pp. 82-93

3. Andrei Lankov, Seok Hyang Kim, Inok Kwak, “Relying on One’s Strength: The Growth of the Private Agriculture in Borderland Areas of North Korea”

Pictured Above (Google Earth): Paekam County (백암군) in Ryanggang Province

According to the Daily NK:

One of the agriculture projects in which Kim Jong Il took a particular interest was potato farming in Baekam County, part of Yangkang Province. However, such high-level patronage has not been enough to save Baekam from disaster, people from the area say, since more than half the discharged soldiers dispatched by the state to work there subsequently disappeared without a trace.

Yangkang Province, a place where “potato farming is the only thing left to do,” first began receiving attention in 1998. When North Korea’s famine was at its peak in October that year, Kim Jong Il visited nearby Daehongdan County and declared, “Potatoes are the same as white rice.” However, there was no labor available to produce the potatoes Kim wanted. So, by way of a solution, the authorities decided to dispatch discharged soldiers en masse to work the potato farms.

Defectors from the region have testified that around 4,000 to 5,000 soldiers were settled in Daehongdan County. To keep these men happy, the Party even settled hundreds of women in the district to marry them. Kim Jong Il suggested they should name sons ‘Daehong’ and daughters ‘Hongdan’.

Then, in December of 2009, Kim Jong Il ordered the establishment of a potato farm in Baekam County as well. In the following May, according to Chosun Central News Agency, Kim visited, and while there he reportedly commented, “I believe it to be highly significant that we turn Baekam County into a potato producer.”

Again according to Chosun Central News Agency, in August of that same year the mass dispatch of discharged soldiers to Baekam County was completed. All the soldiers were given medals and an awarding ceremony was held in Pyongyang; the whole event was broadcast on North Korean TV.

However, now the situation is different. In 1998, a soldier might have accepted the Party’s decision on the sensible premise that “at least I will not starve.” However, young soldiers living in capitalist North Korea today are not being presented with the same incentives. Indeed, people say that handing ‘farming’ down to one’s children as an occupation is like a death sentence. Now, working hard can lead to a life that a cadre in Pyongyang would not look down upon. Living in the countryside and eating little other than potatoes can no longer satisfy.

The result was predictable. In October, 2010 the discharged soldiers were given a one month break to visit their hometowns. It was advertized as a gift for men who had not been able to return home after their discharge from the military. However, in reality it was a holiday given because the men could not be given their rations. They needed to go home to obtain money and necessities.

Regardless of which, a year and six months have now passed since the day when they were meant to return, but 50% of the 3,000 men have not been seen since, sources say.

Read the full story here:
Potatoes at the End of the Earth
Daily NK
Kim So Yeol
2012-4-9

According to the International Business Times (2012-4-3):

Last month, North Korea invited 14 scientists from eight different countries — five alone from the U.S. — to attend a conference with 75 North Korean scientists, and provide their expertise on restoring the country’s environment and securing domestic food supplies. Dr. Margaret Palmer, executive director of Socio-Environmental Synthesis Center at the University of Maryland and one of the scientists who appeared at the conference, recently spoke with the New York Times about her assessment of North Korea’s ecological crisis and its government’s capability to deal with it.

“It’s a depressing landscape, especially this time of year,” Palmer told the Times. “Everything is just mud and everything is being farmed, or attempted to be farmed. But their ability to produce food is being dramatically compromised by a cascade of effects caused by deforestation.”

North Korea’s environmental crisis started in the 1950s during the Korean War, which resulted in massive forest fires and widespread deforestation. The situation was exacerbated during the 1990s when droughts and floods destroyed crops and caused a major famine that killed hundreds of thousands of people. Recovering forests were raided by desperate villagers for food and fuel, many surviving by eating grass and tree bark.

Although the major environmental problems were clear to Palmer, she expressed doubts about the North Korean scientists’ approach to them.

“The presentations were almost exclusively about how to promote agriculture … It felt like [the North Korean scientists] had a sense of the direction of the scientific community in the rest of the world but that they lacked the technology and understanding to implement any of it,” Palmer said.

In contrast, Peter Raven, president emeritus of Missouri Botanical Garden in St. Louis, offered praise for North Korea’s efforts to reforest through planting crops alongside trees.

“They had a fine understanding of agroforestry principles and were applying them in a very understanding way to reforestation,” Raven told Science Magazine.

Norman Neuriter, director at the American Association for the Advancement of Science, who selected the American experts for the conference, said the gathering was heavily monitored and restricted, and expressed disappointment with the limited communication between the advisory team and North Korean scientists.

“One would like to have had more individual interaction, one-on-one or two-on-two, but that wasn’t possible,” Neureiter told the Atlantic Wire.

“We weren’t allowed to talk informally with the scientists,” Palmer told the Times. “We were escorted to separate rooms during coffee breaks and there was no time to casually chat and ask questions.”

Despite the restrictive atmosphere of the conference, the scientists are hoping to move forward with environmental restoration projects, though it is not yet clear how political tensions over North Korea’s nuclear program will impact future collaboration efforts. It is clear that the government must mobilize quickly if it is to avoid another disaster like it experienced during the 1990s.

Further resources below:
1. Q. and A.: North Korea’s Choked Environment

2. Seeking Cures to North Korea’s Environmental Ills

3. The Environment Is So Bad in North Korea, They’ll Even Let Americans Help

According to the Daily NK:

There is widespread displeasure not only at mobilization for various events planned for April but also the growing funding burden being placed on households, sources have reported.

One source from Musan in North Hamkyung Province told Daily NK on the 20th, “In all areas of North Korea including Pyongyang, everyone has been rushing around preparing for the upcoming birthday celebrations since the 15th. The authorities are collecting 20,000 won per household for the purpose of decorating streets and open spaces and to fund artistic performances.”

People in Hamheung in South Hamkyung Province have received orders to prepare eight flower pots per family for the streets and verandas of each home, a source from the city said; those without flowers are apparently purchasing them from traders. “We are so busy trying to get ready for the April celebrations right now that we don’t even have time to breathe,” the source said. “Difficult times during Kim Jong Il’s regime were nothing compared to now.”

A source from Wonsan in Gangwon Province agreed, saying, “It is tough for us to even make 2,000 won per day from trading, but the authorities are asking for 20,000 won from us to buy paint to do the exterior walls of apartments! I thought a new man would make the situation better but it has gotten worse.”

In previous years, the preparation period for April events was called the ‘big cleanup’. The stairs and hallway of apartments and the doors and fences of homes had to be painted with lime, which in recent years came to cost around 5,000 won. Thereafter, students would gather leftover paint and do the walls of their classrooms. However, the cost this year is much higher.

According to the source, “This year it is called the ‘total mobilization period,’ and they have told us that those who do not participate with sincerity will be evaluated politically.”

The period has begun fifteen days earlier than normal, too, which appears to be an effort to heighten the atmosphere for this year in particular.

The Musan source explained, “All organs, enterprises and schools are practicing songs and instruments during the afternoon, and women are using parks and public spaces to practice songs and dances until 7pm. Party cadres, to create a mood for celebration, ordered people to wear their outfits for the day, but the women all look disgruntled by the fact that they have to shiver in skirts all day in the cold.”

“There are lots of fights because local offices have exempted the Union of Democratic Women from paying festival costs, instead putting that portion on other families,” the Wonsan source added, commenting that the measure has been taken because practice hours are in the afternoon when most women ordinarily go to the jangmadang to work.

Read the full story here:
April Feeling Tiresome Already
Daily NK
Choi Song Min
2012-3-22

According to Rodong Sinmun (DPRK):

Korean map changed in the Songun Era led by leader Kim Jong Il.

The land of socialist Korea was widened by land realignment and tideland reclamation.

Several large-scale nature-driven waterways were completed and many artificial lakes formed, thereby changing the mountains and rivers more beautifully.

According to data available, over the past 10 years more than 14 000 hectares of tideland were reclaimed with a result that the coastline of the country was remarkably shortened and many islands turned into land.

Since 1998 over 280 000 hectares of farmland have been realigned, thereby forming large areas of new land.

The completion of nature-driven waterways of over 10 000 kms across the country formed lots of artificial lakes.

Over the past 10 years large areas of new land were obtained by the successful completion of Taegyedo, Kwaksan, Kumsong and Punjiman tideland reclamation projects.

At present, lots of reclaimed tideland turned into farmland to contribute to grain production.

Large and small nature-driven waterways are supplying water for irrigating hundreds of thousand hectares of farmlands without electricity.

See additional information on these projects here:

1. Another Songun-era agriculture project launched in Haeju (2012-1-26)

2. DPRK announces continuation of Unryul land reclamation project (2011-6-14)

3. More DPRK efforts to boost food production (2011-2-7)

4. Taegyedo tideland project completed (2010-7-8)

5. Land reclamation in the DPRK (2009-8-22)

6. DPRK land rezoning policy (2009-7-13)

Read the full story here:
Korean Map Changed in Songun Era
Rodong Sinmun (DPRK)
Pak Ok Gyong
2012-3-22

Pictured Above (Yonhap): A comparison of atlas photos showing the inclusion of Kangnam in Pyongyang.

According to Yonhap:

North Korea has incorporated a key farming county into Pyongyang in what could be an attempt to provide a stable food supply for loyal residents in the capital.

The North had reduced the size of Pyongyang by relinquishing most of the capital’s south and a portion of its west to neighboring North Hwanghae Province, South Korea’s Unification Ministry said last year.

The move reduced the city’s population by about 500,000 to 2.5 million.

However, the North has now incorporated Kangnam County in North Hwanghae Province back into Pyongyang, according to a 2011 almanac map from North Korea, a copy of which was obtained by Yonhap News Agency.

“The move appears to be aimed at using Kangnam County as a supplier of food to Pyongyang residents as the rural area is a major agricultural producer,” said Kwon Tae-jin, an expert on North Korea at the Korea Rural Economic Institute in Seoul.

The North has relied on international handouts since the late 1990s when it suffered a massive famine that was estimated to have killed 2 million people.

Pyongyang is home to the ruling elite that governs the country through rations and a military-first policy. It is located in the southwest region of the country, which is believed to have a total population of 24 million.

Here is my post from last year about the removal of Kangnam, Junghwa, Sangwon, and Sungho from Pyongyang.

Read the full story here:
N. Korea incorporates key farming county into Pyongyang
Yonhap
2012-2-29

In February 2011 I posted reports that the DPRK’s west coast was experiencing record-low temperatures and the ports were frozen. Unfortunately for the North Korean people, history is repeating itself.

Pictured above (Yonhap): two satellite images of the DPRK’s west coast

According to the Donga Ilbo:

North Korea`s fisheries and shipping industries, two key earners of foreign currency for Pyongyang, have effectively been shackled due to a prolonged cold wave that has frozen waters in the Yellow Sea.
With the temperature reaching minus 10 degrees Celsius for more than a month, more than 40 kilometers of sea water in the Yellow Sea off the North`s coast have been frozen. This is the first time in decades that about 200 kilometers of the North`s coastline from the mouth of the Yalu River to the North`s Hwanghae provinces have been frozen.

Experts say the frozen water will not only affect the North’s fisheries and shipping industries, both of which are major earners of U.S. dollars, but also the Stalinist country`s economy and newly launched Kim Jong Un administration.

Massive ice blocks cover 200 kilometers of N. Korean coastline

In Seoul, the Korea Center for Atmospheric Environment Research and the Korea Meteorological Administration said Thursday that based on analysis of satellite images, massive ice 40 kilometers wide was detected in North Korean coastlines spanning 40 kilometers from the mouth of the Yalu River to coastal waters off Pyongyang.

According to the analysis, Korea Bay located in between the North’s Cholsan and Changyon peninsulas has remained frozen since Jan. 10 due to the cold wave. Coastal waters of Unryul County in South Hwanghae Province, the Chongchon River flowing into Korea Bay, and the port of Nampo at the mouth of the Daedong River running through Pyongyang are also covered with ice.

Chung Yong-seung, director of the environmental think tank, said, “In the past, waters off the North Korean coast used to be frozen. But the formation of such large-scale ice is unprecedented.”

Experts blame arctic ice moving south due to global warming for the ice formation.

North Korea has been hit by a severe cold snap this winter. According to the South Korean weather agency, the North’s average temperature last month was minus 8.4 degrees, 0.7 degrees lower than in an average year.

The Chosun Shinbo, the official newspaper of the pro-Pyongyang Federation of Korean Residents in Japan, recently said, “Temperatures in Pyongyang remained below zero from Dec. 23 last year through Jan. 31, the most extreme cold since 1945,” adding, “North Koreans can even walk on the Daedong River.”

Temperatures in the North fell further this month to minus 11.1 degrees on average, down 4.6 degrees from an average year.

Big burden on N. Korean gov

The ice formation in North Korean waters is pressuring the Kim Jong Un administration economically, experts said. The combined share of fisheries and agriculture in the North`s GDP is 20.8 percent, eight times higher than for South Korea (2.6 percent). Fisheries also play a key role in sustaining the North`s economy with catch volume reaching 630,000 tons a year.

Pyongyang`s dollar earnings have also been hit hard due to the frozen sea that has prevented fishing boats from leaving ports. Goh Yoo-hwan, head of the (South)Korean Association of North Korean Studies, said, “The North should export primary products such as fisheries goods, but no fishing operations due to the frozen water will take a huge toll on the North`s dollar earrings.”

Waters near China’s Liaodong Bay and Russia’s Vladivostok have also been frozen, causing the North’s maritime transportation to go awry. Due to soured inter-Korean relations, the North`s trade with the South and Japan has declined and raised the Stalinist country’s dependence on China to 56.9 percent.

Kim Yong-hyeong, a professor of North Korean studies at Dongguk University in Seoul, said, “If the ice formation in waters wreaks havoc on the North’s maritime transportation, this will destabilize the North Korean economy.”

The problem is that ice at sea is growing thicker. The National Meteorological Satellite Center in Seoul said the boundaries between ice blocks and waters in the North’s section of the Yellow Sea were vague last month, but grew clear this month with ice getting thicker.

Director Chung of the environmental think tank said, “Given North Korea’s weather conditions, the ice in the sea will grow thicker through early next month,” adding, “North Korean society will be hit hard if its fisheries and shipping industries are grounded for more than two months.”

And just how productive is the DPRK’s fishing sector?  According to Yonhap:

Chung Yong-seung, head of the research institute, said it is rare for the port to freeze two winters in a row, a development he said could have a negative impact on the North’s fishing industry.

North Korea’s catch reached 663,000 metric tons in 2009, the latest year for which statistics are available, according to the South Korean government data.

Read the full reports here:
N. Korea’s largest port frozen for 2 straight winters
Yonhap
2012-2-10

Extended cold wave freezes key NK sectors of fisheries, shipping
Donga Ilbo
2012-2-10