North Korean Economy Watch

Associated Press
11/4/2005

North Korea’s communist government is urging women in the country to wear traditional Korean clothes instead of pants, according to a North Korean monthly magazine.

“Keeping alive our dress style is a very important political issue to adhere to specific national cultural traditions at a time when the U.S. imperialists are maneuvering to spread the rotten bourgeois lifestyle inside North Korea,” the Joson Yeosung (Woman) magazine said, according to South Korea’s Yonhap news agency.

The magazine said exotic dress dampens the revolutionary atmosphere in society and blurs national sentiment and asked the public to reject clothes that aren’t North Korean style. Instead, it counsels women to wear Hanbok — the brightly colored, loose-fitting dresses that are traditional in the Koreas.

The campaign comes as North Korea struggles to tighten its control over an influx of outside influences, which it claims is part of a U.S. psychological offensive aimed at toppling the communist regime — a charge Washington denies.

Early this year, the North also launched a social campaign against men with long hair, calling them unhygienic, anti-socialist fools.

The North, which demands unquestioning allegiance of its citizens and controls all media, has stepped up the ideological education of its people to counter outside influences. However, the country’s loosely controlled border with China has led recently to increased traffic in smuggled recordings of music and videos from the outside.

Korea Times
Andrei Lankov
10/28/2005

North Korea of 2005 is on a crossroad. Its people are not sure where to go, and its government tries hard to stay in control. But things are changing, the 50-odd years of Juche-style Stalinism are over or almost over. The long decease is not over yet, but there are clear signs of recovery. It has a future. This future is unlikely to be easy, but the country began its slow move forward.

It was a perfect sunny October day here. It was my first visit in two decades. I stood on the city’s main street, not far away from Kim Il Sung University which I attended 20 years ago, and was looking around.

A small crowd near the Chinese Embassy wall attracted my attention. People were carefully studying something inside a large window on the wall: some finished and went away, only to be replaced by others. Of course, I came closer.

The people’s attention was attracted by the pictures which were put into the Chinese Embassy’s “information window”. The pictures were large and colorful, but otherwise absolutely unremarkable. The photos and captions were no different from the stuff the cultural attaches across the globe put on the walls of their embassies – the usual boring fare about growth of shrimp production, new computer classes and state-of-the-art chicken farms. However, in North Korea of 2005 such mundane matters would attract a crowd. Those pictures gave a glimpse of the overseas life.

This small episode was a sign of what was in the air in North Korea of 2005: people are eager to learn more about the outside world. They are less afraid to show their interest in what once was forbidden knowledge, and they are increasingly uncertain about the future.

At a superficial glance, it feels as if the entire city has remained frozen in time since the mid-1980s. On my first day, I walked some 5-7 km across the downtown, and had no reason to worry that I might loose my way. All old buildings were still there, and very few structures appeared over those two decades.

The North Korean capital is still the same city of somewhat dilapidated Soviet-style apartment projects (with traditional huts hidden inside the blocks), nearly absent traffic, uniformed police girls on the crossroads, and crowds dressed in the old good “Mao suits”.

As a matter of fact, “crowds” might be an exaggeration. The city felt empty, and at all probability it was half-empty in those days. As part of the regular mobilization program, most of its population was sent to the countryside to work at the fields or to join the “battle for harvest” as this rather mundane operation is known in North Korea.

Like other socialist economies, North Korea has serious troubles with agriculture, and the townsfolk is required to provide manpower for the farms twice a year, during planting and harvesting.

However, this impression of unchanged city is misleading. The conversations with people clearly demonstrate that over those decades Pyongyang has changed – or rather its people has changed. It was the same city, but a different society.

People were frank – not as frank as they would probably be in most other countries, of course, but still much franker than in past.

When none of our supervisors was hanging around, it was possible to strike a meaningful conversation with a North Korean. And in a matter of minutes the conversation would slide to issues nobody was insane enough to approach 20 years ago.

People wanted to know how the life overseas looks like. They asked about salaries and prices, travel and housing. Well, these questions might sound a bit too materialistic for some of our readers.

Perhaps, but the North Korean government has always insisted that it is second to none when it comes to meeting material demands of the populace. And it seems that the North Koreans are beginning to feel doubts about truthfulness of these long-standing claims.

There are good reasons for such doubts. Even grossly privileged Pyongyang does not look like a rich city, to put it mildly. Of course, statistics about the large and growing gap between two Koreas (approximately 20-fold if per capita GDP is used) is widely known, but it is altogether different matter to see this disparity with one’s own eyes.

However, one cannot see Pyongyang as really impoverished. The serious poverty could be encountered in the countryside.

We could catch a glimpse of it on our way to the city of Kaesong. Compared to destitute north-eastern provinces, this is still the privileged part of the country, but the picture was disturbing.

The Pyongyang-Kaesong highway is a road of reasonable quality (albeit with bad paving), but it was completely empty, with hardly a dozen vehicles encountered over hundred kilometers.

There were almost no signs of agricultural machines in the fields, with harvesting made by bare hands of farmers and city dwellers who are mobilized to join the “battle for the harvest”.

The landscape was free from all those intrusive details of modern civilization which so often annoy tourists (of course, the tourists assume that they would have access to such amenities back home).

No mobile phone antennas, few motor vehicles, very few powerlines. Sometimes it was easy to imagine oneself transported back to the times of Tang Empire when the kings of Silla dynasty ruled the Korean peninsula.

This might be a good feeling, of course – as long as one does not think too much about people who have to live in this “romantic” area under nearly medieval conditions.

And these people looked bad – worse, actually, than 20 years ago when a motor harvester was still a usual sight in a North Korean paddy field. People in the countryside were undernourished, badly dressed, their brown seemed faces covered with deep wrinkles.

Kaesong was clearly one large step down the North Korean hierarchy of prosperity (or lack thereof). It was strange to think that we were merely two hours drive from the hyper-modern and affluent Seoul – and the sight of Kaesong makes one think about the likely impact which the unavoidable “discovery” of South Korean affluence will have on those destitute people.

It also makes to have second thoughts about unification – it is difficult to imagine how those destitute farmers will find the common ground with their brethren from another side of the border. They will do it somehow, no doubt, but adjustment is bound to be painful.

However, in spite of all destitution there are many reasons for hope. Within those days we managed to meet quite a few Western businessmen quietly operating in North Korea. In order to succeed in this strange and often treacherous environment, one should remain silent and as press-shy as possible, but there is a number of the foreign businesses operating there.

The businesspeople are surprisingly optimistic about ongoing changes and about the country’s future: they talk about great transformation they witnessed over the last few years. The private economy is growing fast and the local people are hard-working and full of initiative.

The officials are increasingly corrupt, of course, but this is not necessarily bad: if they are willing to accept kickbacks, they do not care that much about following the official regulations which often are remarkably unreasonable.

Of course, the growth of market economy does not mean only good things. One of few visual changes easily noticeable in Pyongyang was an increase in social inequality. Back in the 1980s, it was not that difficult to tell an official from a humble commoner. Officials were dressed better, and sported leather shoes while the commoner had the cloth-and-plastic footwear. However, the difference was not as pronounced as it is now when on the Pyongyang street there is a small minority (few percent, perhaps) of people whose dress would not be out of place somewhere in downtown Seoul.

Sometimes, things old and things new go hand in hand. In one of the companies we visited, I spotted what is probably the worst example of comically exaggerated propaganda I’ve ever seen (and somebody dealing with North Korea for 20-odd years has seen a lot of comically exaggerated propaganda).

The hand-written poster explained why Kim Jong-il was superior to all other great minds of the humanity: “Marx was 28 years old when he founded The Communists’ Union; Lenin was 25 years old when he founded The Working Class Liberation Union; but the Dear Leader was 11 years old when he founded the Group to study the strategy of General Kim Il Sung!”

The same place also had a floor plan which demonstrated what the Great Leader did when he visited the company back in the 1980s – the plan signs indicated where the great man stood for a minute and which path he followed while moving from one desk to another. However, the same factory was also a place where we saw the most rational manager, whose speech was remarkably free from all kinds of usual demagogy. This lady in her 50s spoke like any manager, from Alaska to Madagascar would probably talk to visitors.

BBC
Andrew Harding
10/28/2005

It was early on Sunday morning, but Roh Buk-chong, a 39-year-old postman, was already striding down the road leading north from Pyongyang.

“I am a volunteer,” he said. “I am going to help the farmers with the harvest – full of patriotic enthusiasm.”

He was not alone. In a scene strangely reminiscent of a 1950s Soviet propaganda film, the road was clogged with pedestrians and cyclists, heading for the nearby rice fields in the bright sunshine.

A government van passed by with loudspeakers on the roof, playing a rousing tune.

“They call me the girl who works well,” went the lyrics. “They call me the girl who works faster than the fastest horse.”

All this is part of what observers say is a concerted push by North Korea’s isolated regime to boost domestic food production, in a country where a third of the population is chronically malnourished.

It may be working. According to some predictions, this year’s harvest will be 10% larger than in 2004.

But that will not be enough, warned the UN World Food Programme’s country director, Richard Ragan.

“North Korea is chronically food insecure, so it’s unlikely in the near term that it will ever produce enough food,” he said.

Aid withdrawal

For the past decade, international food aid has helped bridge the gap for millions of North Koreans, many of whom starved to death during a famine in the mid-1990s.

The WFP now has 19 food processing plants in the country, helping to feed 6.5 million people.

It is backed up by a team of foreign monitors, who keep track of malnutrition rates.

But all that is about to change. North Korea’s heavily politicised drive for a bigger domestic harvest has been coupled with a new and more controversial move to end international food aid, and restrict the number of foreign aid workers in the country.

Although the details are being negotiated, all the WFP’s food plants are due to close within the next month.

“North Koreans are proud people,” said Mr Ragan. “They don’t want to create a culture of dependency, which makes a lot of sense.

“But there are still real humanitarian needs here, and it remains to be seen now they deal with them.”

Some aid is expected to continue in the form of development assistance next year.

China and South Korea are also likely to help make up any shortfall in food supplies.

But North Korea’s most vulnerable groups are now facing a period of uncertainty.

A key concern is how food will be distributed, and whether the army’s needs will be put ahead of the rest of the population.

High inflation recently prompted the authorities to abandon a market system for grain distribution, in favour of the old state-controlled policy – which the WFP has described as “inoperable”.

BBC
10/25/2005 

North Korea has admitted it is holding 21 South Koreans either captured during the 1950-53 Korean War or subsequently, the South Korean government has said.
Seoul had pressed the North about 52 POWs and 51 citizens it believes were abducted after the war.

Seoul has been raising the issue for decades, but has recently been wary of campaigning too hard for fear of damaging relations, analysts say.

It is not clear why the normally secretive North Korea has responded.

“North Korea has confirmed there are 11 abductees and 10 prisoners of war alive in the North,” a South Korean Unification Ministry official told Reuters news agency on condition of anonymity.

Of the other South Koreans whom Seoul had inquired about, the North said 10 kidnapped citizens and six POWs were dead, and the rest unaccounted for.

Many people in South Korea believe around 1,000 South Koreans are alive in the North.

These include more than 540 POWs, according to the Red Cross.

Reunions

A number of the kidnapped South Koreans will be able to see their families again during the next round of reunions between relatives who ended up on different sides of the Korean border after the war ended, Yonhap news agency reported. This is scheduled for 5-10 November.

Japan also believes its citizens are being held in the North against their will.

It has been much more vociferous in its inquiries, and in 2002 Pyongyang admitted it had abducted 13 Japanese citizens in the 1970s and 80s, but said eight of them had since died.

The five still alive returned to Japan three years ago, but Tokyo questions whether the others are really dead, and believes there may be yet more held captive in the North.

Korea Times
Andrei Lankov
10/11/2005

“How much do they earn there, in the North?” “What are North Korean salaries now?” These questions come naturally, even if people are aware that in a socialist economy the formal size of one’s salary is less significant an indicator of wealth than it is in capitalism.
Under socialism, access to goods is at least as important as the amount of money in somebody’s possession. Since retail prices in the socialist economies tend to be subsidized, this means that many goods are not readily available in shops, but are distributed by the state bureaucracy instead. Thus, people who are deemed more deserving get such goods… goods that are not available to the “less valuable” people.

A party bureaucrat and a skilled worker often might have roughly similar salaries in a socialist economy, but their actual consumption levels may be vastly different. Apart from bureaucrats, another group of people who have privileged access to commodities are people employed in the retail system. They always can divert some goods from the public distribution system and use them either for their own consumption, or for barter with those who control other valuable commodities. Thus, the position of a sale clerk is seen as very prestigious occupation in the North.

The 2002 reforms (never called “reforms” in the North Korean press) dramatically changed the structure of wages and prices in the country. For a while it was not clear what the current price and wages levels were, but recent research by the World Food Program seems to answer a few questions. Now we know what was regarded as “normal” wages in 2004.

According to the survey, most types of low-paid workers earn between 1,700 and 2,500 won per month, with an average estimated at 2,100. Low-level professional jobs such as clerks and teachers at nursery and primary schools earn between 1,400 and 2,000 won per month. The average old age pension is just 900 won; women, in particular housewives, sometimes get pensions as low as 300_400 won.

The official exchange rate is 1,700 won per Euro (they to play down the significance of the imperialist dollar, so exchange rates are usually quoted in euros). However, throughout 2004, the actual exchange rate fluctuated between 1,600 and 2,200. This means that the average pension was something like 50 cents a month, with a nursery teacher earning as little as one dollar a month. This is not as bad as it sounds, since prices are also relatively cheap. But this is still pretty bad…

Most of the people who draw salaries live in the cities (some 70% of the North Koreans are inhabitants of urban areas), and rely on the public distribution system for their survival. The system, which almost ceased to function a few years ago, obviously has made a moderate comeback. Since all data in the secretive North is classified, nothing is known for sure, but it seems that in early 2005, the Public Distribution System was “the main source of cereals for the 70 per cent of the population living in urban areas” (such was an estimate by the FAO, a U.N. food agency).

Still, the official rations are hardly generous. According to the WFP, in early 2005 rations were cut to 250 grams per person per day _ 40 per cent of the internationally recommended minimum. People have to purchase food on the markets, and this food is expensive, with rice costing some 500 won a kilo.

According to the FAO report, “the income of cooperative farmers from the annual obligatory crop sales to the Government varies greatly from one farm to another, resulting in monthly incomes per person ranging from 500 won to 4000 won.” But farmers can also substantially increase their income by selling the produce from their kitchen gardens, and by hillside farming which is done on the steep slopes of the mountains. The latter activity has become common in the North over the past decade. It is formally forbidden but done nonetheless, and it seems that a large part of the hillside produce goes outside the public distribution system.

Unemployment is quite high, but it is hidden. Formally, everybody has a job, but a persistent shortage of raw materials, spare parts, machinery, and power supplies means that few factories actually operate at full capacity. In many cases people come to their factories and offices and sit there idly, spending just a couple of hours a day doing some meaningful work. They still have to come, since otherwise they could lose access to food rations, and this would make their situation impossible, probably even threatening their physical survival.

According to interviews with officials, and other information garnered, the WFP estimated that some 30 percent of the North Korean workers are either permanently or temporarily underemployed or unemployed.

As usual, women are more likely to become unemployed. But perhaps they do not mind. Why? Well, is it possible for a family to survive, even on two salaries, if the official income can merely buy eight kilos of rice to augment the distributed 200 grams? Of course, the answer is “no”, and even in the most difficult circumstances people need more than just rice. Hence, the survival strategy of most families depends heavily on the efforts of their women. While formally seen as “unemployed housewives”, women produce most of the income, ensuring the family’s survival. Indeed, the new-born North Korean capitalism has a female face. But that is another story…

Herald Tribune
Choe Sang-Hun
10/10/2005

Here in the North Korean capital, where ubiquitous slogans posted on deserted boulevards and carved into mammoth towers give the city the look of an off-season theme park dedicated to a bygone ideology, one message is conspicuously absent these days.
 
There is no mural showing muscular North Korean soldiers stabbing American troops with bayonets, as there once was. No longer is there a billboard depicting a North Korean missile slamming into Capitol Hill in Washington. And there are no shrill slogans exhorting North Koreans to prepare for “a final battle with American imperialist aggressors,” as they did in the past.
 
“It is true that we have removed anti-American slogans,” said Hong Sung Chul, one of the North Korean officials who recently escorted a group of South Koreans on a tour of the North. “We hope the Americans reciprocate our good will.”
 
Hong said the removal of anti-American slogans was part of North Korea’s effort to cultivate a favorable atmosphere amid six-party talks aimed at ending North Korea’s nuclear weapons program. A new round of negotiations is scheduled for November.
 
But it is still a toss-up as to whether the banished imagery was part of an official campaign to recast the most enduring feature of North Korean psyche, the fear and loathing of Americans, or just a publicity effort for visitors.
 
Either way, the revamping of propaganda in North Korea’s showpiece capital was as much a sign of change here as the busloads of foreign tourists rushing through the once-forbidden city. These modest indicators offer a glimpse into a country that is gradually regaining confidence after years of famine and after tentatively increasing its contacts with the outside world.
 
Pyongyang is not a mirror of the rest of the country. The government stocks the city with politically reliable citizens and keeps its living standard much higher than elsewhere. But in the sales pitches and bargaining of store clerks and the relaxed manner of Communist minders escorting visitors, eager to polish their government’s image, a new measure of optimism was palpable among the country’s elite.
 
The government minders, part tour guides and part public relations officers for the regime, talked about the importance of rebuilding the North Korean economy and attracting foreign investment with the same rehearsed spontaneity that North Koreans once recited anti-American diatribes.
 
As North Korea prepared to celebrate Monday the 60th anniversary of the ruling Workers’ Party, throngs of students and citizens have been mobilized daily to rehearse for a massive outdoor rally. Streets were festooned with red-and-yellow party flags emblazoned with the images of a hammer, sickle and calligrapher’s brush.
 
For almost two months, the authorities have also brought thousands of people into Pyongyang in North Korea’s version of a pilgrimage to Mecca. Here, the faithful were treated with an “Arirang” extravaganza, the closest thing to an Olympic opening ceremony in North Korea, but one with a decidedly totalitarian flavor.
 
In an unusual gesture of openness, the North Koreans this year opened the show to outsiders, accepting hundreds of them daily, mostly from South Korea, in a scheme driven not simply by a desire to educate outsiders on North Korean socialism, but also by commercialism.
 
For these outsiders, the trip was an occasion to witness the country’s cautious and clumsy steps into the outside world even as the North is still burdened with the ideas of an outmoded era. Unwittingly or not, North Korea, by opening itself to well-fed South Koreans wielding digital cameras and bursting with U.S. dollars, was casting itself as one of the world’s weirdest tourist destinations.
 
In between visits to Communist monuments, tourists were ushered into souvenir shops where smiling beauties sold everything from mushrooms to “adder liquor,” a leaky bottle of fiery alcohol with a dead snake in it. The women extolled the concoction’s purported effectiveness as an aphrodisiac and only accepted euros and U.S. dollars.
 
The South Korean tourists spent profusely, buying goods whose main attraction was neither quality nor prices, but rather the flimsy packaging and outdated design: perfect I-have-been-there mementos from the world’s last remaining “socialist paradise.”
 
North Korea demands that all visitors start their trip to Pyongyang by bowing before the 23-meter-tall, or 75-foot-high, brass statue of Kim Il Sung, the first ruler of North Korea.
 
On a recent trip, however, South Korean tourists stood upright before the statue, some with hands in pockets, some clicking digital cameras, as an official solemnly bid them to bow. If North Korean minders were enraged, they did not show it.
 
But questioning revealed the minders’ unique take on their country’s problems with the outside world.
 
“People in South Korea and the rest of the world don’t understand us,” complained Hong. “We know some countries ridicule us for our economic difficulties. We want to rebuild our economy fast. How good will it be if we can use the money spent for our nuclear weapons to buy rice for our people. But we can’t.
 
“We saw what the Americans did to Iraq,” Hong continued. “What option would a small country like us have but to build nuclear weapons when a big bully is determined to strangle us and gang up on us?”
 
Park Man Gil, a North Korean official, stressed his country’s desire for greater contact with its neighbor. “We want more economic cooperation with South Korea,” he said.
 
The North’s desire to make connection to the outside world was confirmed – vigorously, in fact – by a South Korean executive.
 
“You always hear two voices here. On one hand, they lash out at the United States; on the other hand, they are conciliatory,” said Park Sang Kwon, president of Pyeonghwa Motors of South Korea, which runs an auto-assembly factory in North Korea. “As a person who has dealt with the North Koreans more often than any other from the outside, I can say with certainty that the North Koreans really want to be accepted by, and live with, the Americans.”

Christian Science Monitor
Donald Kirk
10/4/2005

Its South Korean funders say it offers potential for cultural exchange. But the monk who oversees it readily admits no North Koreans may visit.

As they lead visitors along a trail below craggy rocks inscribed with praise for the late “Great Leader” Kim Il Sung, young North Korean guides offer a carefully crafted narrative.

They criticize President Bush. They take on US policy. And last weekend, they appeared eager to denounce the dismissal of Kim Yoon Kyu, who is currently under investigation for fraud. The South Korean executive worked for more than 10 years to develop this unusual tourist zone on the east coast several miles above the demilitarized zone that separates North and South Korea.

“We are willing to reduce the number of tourists coming here as an expression of our confidence in him,” says Koo Eun Hyun, a smiling 20-year-old, repeating the North’s demand for reinstatement of Mr. Kim as president of Hyundai Asan, part of the Hyundai group, which is investing $1 billion in building the complex.

Mr. Kim led the project, now subsidized by the South Korean government, from the time the first shiploads of visitors sailed from South Korea seven years ago. Tourists now travel by newly paved road, and Hyundai Asan in June announced the millionth visitor – far short of the 5 million it had hoped for.

Indeed, the project loses vast amounts of money, and is likely to lose still more. The standoff over Kim’s dismissal is escalating amid a South Korean investigation into alleged fraud in economic projects in the North – including whether some funds wound up in the hands of North Korean officials – prompting the North to cut the quota of tourists from 1,200 to 600 a day.

Perhaps as a result, Kim Young Hyun, a Hyundai Asan vice president, prefers to talk about a $10 million project, largely funded by South Korea and Hyundai Asan, to rebuild a Buddhist temple complex inside the zone that was largely destroyed in the Korean War. “Buddhism is traditionally the religion for Koreans,” he says. “Cultural exchange can be the foundation of economic exchange.”

The Venerable Jejeong, the scholarly South Korean monk who oversees the complex readily admits that North Koreans are banned from the complex, just as they are from the rest of the zone, except when they come to work. Those few North Koreans on the site, he says, “ask questions about history but do not ask other questions.”

In fact, he says, he’s never talked to North Koreans outside the zone and has no idea how freely – or if – they can practice their religion. Still, he shares the optimism of South Korean authorities about the future.

“We can minimize the differences and find common ground,” says Mr. Jejeong, who has practiced Buddhism in Thailand and San Francisco. “Currently our educational systems are completely different. North Koreans are not interested in religion.”

Jejeong places his hopes for opening the temple to worship “after unification.” He cites an easing of religious restraints in China. “The North Koreans may be influenced by China indirectly,” he muses.

In the meantime, the temple serves as a monument to North Korean propaganda. A plaque in front of the skeletal outlines of new buildings says that Kim Il Sung and his wife, the mother of current leader Kim Jong Il, visited on Sept. 28, 1947. The plaque blames the leveling of the complex on US bombing.

But for now, North Koreans would rather prove their authority over Hyundai Asan than hark back to the war. Tourists who visit traipse along a few familiar trails, attend an acrobatic performance, dip into baths fed by hot springs and dine in modern restaurants, all closed to North Koreans seen toiling with ancient implements in the fields beyond the wire.

They listen as guides extol the beauties of the region, all under the watchful gaze of North Koreans as anxious to parrot policy as to impose fines for littering.

“We regard [Hyundai Asan’s] Kim Yoon Kyu as a pioneer,” says Miss Koo. “We sacrifice profits for the sake of friendship.”

The Guardian
Jonathan Watts
10/3/2005

Of all the bars in all the world, there is probably none as exclusive, surreal or intriguing as the Random Access Club in Pyongyang. There are also few institutions that are quite so necessary to the mental well-being of the customers.

Open for business only on Friday nights, the RAC is a watering hole for North Korea’s tiny expatriate community; the 300 foreign residents allowed to live among the 22 million population of the planet’s most reclusive nation.

At first sight, the club inside the compound of the United Nations World Food Programme could not look more mundane nor the clientele appear less exotic. Apart from the decor – mostly copies of Chinese contemporary artworks – the simple bar, concrete walls and well-worn pool table might as easily belong to a church hall in Croydon as an expat hang-out in Pyongyang. The few dozen customers seem so earnest and engaging that they too could be mistaken for a suburban congregation rather than the disaster and war hardened aid workers and diplomats they really are.

What is bizarre is the context. The RAC is an oasis of modern globalised normality inside a land where time has not only stood still but gone backwards. North Korea exerts more control over its citizens than the Soviet Union in the dark days of Stalinism. It takes the ideology of 1984 to levels that George Orwell could not have dreamed of. It is rusting proof that the engine of industrial development has a reverse gear. And it is a dark and uncomfortable warning of what could happen to the world if we ever run out of oil.
To find a place like the RAC in the midst of this is like seeing a tiny postcard of Brighton beach stuck on Picasso’s Guernica, or having the latest Peter Greenaway film interrupted by a few seconds of Neighbours.

The bar’s short history is the story of the gradual opening of North Korea since the government reluctantly requested outside help to feed a population racked by famine, droughts and floods.

When it started in 1995, the WFP had just two representatives running a small aid project from rooms in the Koryo hotel. By 1997, North Korea had become the biggest humanitarian operation on the planet, with international organisations providing food and medicine to more than a quarter of the population.

In the meantime, the resident aid community – which included other UN agencies and about a dozen NGOs – had swollen to more than a hundred and been moved to the diplomatic district. The RAC emerged in response to the growing need among this group for a communal gathering point and a place to let off steam about the frustrations of working in such a difficult political and humanitarian environment.

Foreigners in Pyongyang arguably face more restrictions than their counterparts in any other country. They cannot make private visits to the homes of North Koreans, they cannot travel outside of Pyongyang without permission and they are not supposed to exchange their dollars and euros for local currency.

The work can be harrowing. Although the worst of the food crisis passed more than five years ago, some areas still suffer from poor nutrition and a lack of basic medicines. In remote outposts, WFP monitors can be extremely isolated. In Hyesan – a four-day drive from Pyongyang – the organisation’s representative lives alone for eight weeks in a basic hotel where the temperature in the lobby can fall as low as minus 17 degrees in the winter. There are no other foreigners, their local guides leave them at the weekends, and they are not allowed to socialise privately with Koreans.

In Pyongyang, the situation is not nearly as bad. Many visitors are surprised at the beauty of this showcase city. Compared to most capitals, it is clean, quiet and safe. There is sufficient food, some fine duck and noodle restaurants and even a little capitalist entertainment in the form of the casino, karaoke bar and golf course at the Yanggakdo hotel.

In addition, years of pure ideology – the utter subjection of the individual to the collective will of the state embodied by the leader Kim Jong-il – have produced some impressive (or scary, depending on your point of view) cultural marvels, such as the circus and the performances by young dancers and musicians at the children’s palace.

Those looking on the positive side of life in North Korea also point out the friendliness, innocence and high levels of education of many of the people they meet, as well as the cleanliness of the air in a country starved of energy and short on traffic. Because of this, and the frequent blackouts, Pyongyang is probably the best capital in the world for stargazing.

But the political problems undermine most of these benefits. Most foreigners accept their phones are bugged. Some suspect that much of what they see during inspections is staged. Even among the old-hands who have been in the country for years, many say they have never made a Korean friend.

This is largely because North Korea is gripped by a siege mentality – and not without justification. The country has been in a state of hot and cold war with the US since 1950. Outsiders are seen as potential spies or sources of ideological impurity.

There is good reason for the government to fear charity. Every smile or hand-out from a foreign aid worker undermines the state’s xenophobic propaganda and philosophy of “juche” self-sufficiency.

The WFP’s mission in North Korea is the only one where aid monitors do not have unrestricted access to the entire country. But the UN organisation has gradually widened its focus, pushing back the boundaries where it operates, expanding its presence to 42 foreign and 70 domestic staff, and meeting regularly with thousands of local officials who might otherwise never come into contact with a foreigner. Its monitoring ambitions remain the same as when the RAC was named: random access to all parts of the country.

This is the aspect of aid work that North Korea fears the most. Although the food and drugs are humanitarian, their side-effect is political. As most of the customers in the RAC will testify, one of the biggest changes since the aid operation began is in attitudes. Ten years ago, most North Koreans would turn their backs on a foreigner. Now they are almost as likely to smile.

That, more than anything, may be why the RAC could soon be losing most of its customers. The government has ordered all humanitarian work to end by the end of the year. Negotiations are still under way regarding what that will mean, but one resident’s estimate is that as many as 80 of the 120 aid officials in Pyongyang will have to pack their bags and leave by December 31.

The mood in the RAC has never been more gloomy. Out will go most of the young blood. Those who remain are likely to be diplomats, a sharply reduced corps of aid workers, five English teachers and a handful of businessmen.

“It’ll be like going back to 1994,” commented one regular at the bar.

“The jokes these days are black ones about all the second-hand fridges and cars that will flood into Pyongyang’s markets at the end of the year,” said another.

It is still possible that as one door closes others will open. North Korea welcomes economic development in the form of investors and technical support for infrastructure projects. The government wants to boost the tourist industry. A new railway is about to open across the demilitarized zone that will increase the flow of visitors from South Korea. The growing influence of Beijing is bringing in more people and goods from China. Progress in six-nation nuclear talks could also mean more atomic energy agency inspectors and diplomats from Japan and the US.

But ready or not, North Korea wants its independence back. It wants its future foreign guests to be visiting town on short-term visas, not moving in for years on end and setting up their own social club. For North Koreans and expats, there will be plenty of other bars, but at the RAC, it is time to drink up. The government may soon be calling last orders.

Korea Times
Andrei Lankov
9/20/2005

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

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

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

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

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

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

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

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

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

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

Korea Times
Andrei Lankov
9/6/2005

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

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

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

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

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

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

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

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

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

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

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

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

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

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