North Korean Economy Watch

UNFAO
10/26/2001

The Democratic People’s Republic of Korea is likely to record its best harvest for six years, but with domestic food production still well below consumption requirements, the country will again need substantial external assistance in 2002, two United Nations agencies said today.

Favourable weather during the main growing season, bigger budgetary allocations for agriculture, greater use of farm machinery and increased supplies of donated fertiliser should enable DPRK to produce some 3.54 million tonnes of cereals in 2001/02 (including rice in milled terms and potatoes in cereal equivalent (2001/02), up 38 percent on the previous year’s harvest and its highest output since 1995/96, according to a report by the UN Food and Agriculture Organization (FAO) and the World Food Programme (WFP).

Relatively good and well-distributed rainfall from mid-June to end-August benefited the main 2001 crops, overcoming the adverse effects of a prolonged spring drought, experts from the Rome-based agencies who undertook an assessment mission to the country from 25 September to 5 October concluded.

Rice production was forecast to reach 1.34 million tonnes (milled basis) in 2001, 22 percent more than last year, and the maize harvest projected to rise by 42 percent to 1.48 million tonnes.

The overall 3.54 million tonne estimate for 2001/02 includes yet-to-be-planted winter/spring wheat, barley and potato crops that in recent years accounted for 10-15 per cent of the country’s annual output. “The production estimate may need to be revised once the harvest outcome of these crops is known,” the FAO/WFP report noted.

But it pointed out that in addition to perennial droughts and floods, critical shortages of fertiliser, agro-chemicals and farm machinery persist, and there is little scope for expanding the cultivable area beyond its present level of some two million hectares.

Notwithstanding the significant recovery this year, “domestic production will fall well below the minimum food needs and the country will again have to depend on substantial external food assistance next year as its capacity to import commercially remains highly constrained,” the report said.

Estimating total cereal utilization needs in 2001/02 at 5.01 million tonnes, it therefore projected a deficit of 1.47 million tonnes (down from 2.2 million tonnes in 2000/01). “With commercial imports anticipated at 100,000 tonnes, 1.37 million tonnes will need to be covered by food aid and concessional food imports.”

On the basis of vulnerability assessments the report recommended that about 610,000 tonnes of food aid, including 525,000 tonnes of cereals and 85,000 tonnes of other food items be mobilised for population groups deemed to be most at risk: small children, pregnant and nursing women, and the elderly – especially in urban areas. It said bilateral aid and concessional food imports should meet the balance.

“The uncovered deficit is large and must be viewed very seriously. It needs to be emphasised that unless the international community responds positively and substantially, millions of people of DPR Korea, including large number of children, old people, pregnant women and lactating mothers will face hunger over prolonged periods with severe consequences for their health and welfare,” the joint report says.

“The crucial food aid safety net needs to be maintained until sustainable food security is achieved through the recovery of the economy and the rehabilitation of the agriculture sector, for which substantial international assistance will be needed,” the report concluded.

From The Economist
June 17th, 2000

About 100,000 northerners are believed to have crossed into north-eastern China, where some 2m ethnic Koreans have lived alongside the Chinese since the mid-1800s. Recently, the numbers crossing the river have slowed down, partly, it is thought, because the famine in North Korea has eased. But the North Korean guards have also doubled the bribe they demand from those they let pass.

Some people return home after scavenging for food, but many remain, hoping to better their lives or to escape persecution. They face a perilous existence, in constant fear of being caught and deported. It is from these refugees that a picture of the grim existence of North Koreans emerges. They also give a glimpse of the extent of the opposition to Kim Jong Il’s rule.

That opposition is feeble. Some of it comes from Christian groups, especially those established by South Korean missionaries who look after some of the refugees. A mission in Yanji, for instance, helps to care for 100 or so North Korean children and 50 adults. Missionaries say they convert about one in five to Christianity and some are then sent back to North Korea to spread the word.

There are said to be about 50 underground churches in North Korea, usually houses where people go to pray and read the Bible in secret. Although there is little sign of it yet, some people think that the Christians could one day openly stand up for their rights, as the Falun Gong movement has in China.

Other refugees seem more determined to overthrow rather than challenge the North’s leaders. A group of armed North Korean soldiers sneaked into China in May to join a resistance group hiding in the mountains, according to one missionary. This, he claims, has made China strengthen its frontier controls.

A North Korean academic, who came to China two years ago to carry out a survey of the refugees, says he decided not to return home: after experiencing life in China and learning about South Korea, he felt betrayed by the North’s regime. Now he says he is determined to help overthrow it.

Some people talk of attempted coups. One is supposed to have been staged by the 6th Army Corps in the north-east of the country in January 1996, but was quickly put down. Officers were executed and the unit has since been dissolved, recalls a former lieutenant in a North Korean special-forces unit who crossed the Tumen river with his wife and son three years ago.

A woman who fled a year ago says one of the North’s big problems is a lack of food-processing skills. Only when she came to China did she realise that canned fish could be sold for more money than raw fish. She plans to use this valuable piece of capitalist knowledge if warmer relations ever allow her to go home.

BBC
6/13/2000

South Korean President Kim Dae-jung’s emotional plea for solidarity ahead of the unprecedented summit with North Korean leader Kim Jong-il —–

“Honourable citizens of Pyongyang and North Korea, I am truly glad to meet you. I came here because I wanted to meet you.

“I came here because I wanted to see the mountains and rivers of the North that I have yearned to see even [in] my dreams. It has been too long. I have finally come after going around and about over that long period of time.

“It was not just once or twice that I plunged into deep despair thinking that I would never be able to step on the soil of the North in my lifetime. But now, I have attained my lifelong wish.

“The 70 million Korean people in the South and North are also ardently hoping to attain their wish as soon as possible.

‘Just a beginning’

“More than anything, I wholeheartedly thank Chairman Kim Jong-il for inviting me and my delegation. I also thank all of you who are welcoming us so warmly like this. And I convey warm greetings from your compatriots in the South.

“As president of the South, I came to Pyongyang to lead the effort for peace, co-operation and unification in accordance with the will of your compatriots in the South.

“I believe the expectations which our compatriots in the North have in the summit between Chairman Kim Jong-il and I are as great as those of your compatriots in the South.

“This is just a beginning. Since the inter-Korean summit, which was just a dream, is now reality, we will solve problems one at a time.

Bitterness

“Together with Chairman Kim Jong-il, I will give my all in searching for ways for all Koreans in the South and North to live peacefully and lead a better life.

“Honourable citizens of Pyongyang and North Korea, we will not be able to resolve all at once the bitterness that has accumulated over the past half century.

“But well begun is half done. I wholeheartedly hope that all the Korean people will have hopes for reconciliation, co-operation and peaceful unification on account of my visit to Pyongyang.

“We will do our utmost to resolve the problems that can be solved one at a time.

‘I love you’

“We will surely solve those issues which we do not solve this time by meeting for a second and third time.

“I hope that the citizens of Pyongyang and North Korea will give Chairman Kim Jong-il and me strong support and encouragement.

“Compatriots in the North, we are one people. We share the same fate. Let us hold hands firmly. I love you all. Thank you.”

UNFAO
11/13/1997

Despite an improved harvest in North Korea, the country will enter 1999 with a large food deficit and will need to import 1.35 million tonnes of food grain, including 1.05 million tonnes as food assistance to meet the minimum nutritional requirements of the population, according to a joint report by the UN Food and Agriculture Organization (FAO) and the UN World Food Programme (WFP).

The report, based on the findings of a crop and food supply assessment mission that toured the country extensively last month, forecasts North Korea’s cereal production for 1998/99 at 3.5 million tonnes, some 30 percent higher than last year’s severely reduced crop.

But this harvest is only enough to cover minimum consumption needs for eight months. Apart from foreign exchange constraints that limit commercial imports, the general economic decline in the country and natural disasters have seriously compromised national food security.

“The food situation in DPR Korea (North Korea) remains precarious and the country urgently needs to address the underlying problems in the economy and agriculture if it is to avert serious problems in the future,” said the assessment team leader Mr. Abdur Rashid.

The report recommends that out of the 1.05 million tonnes of food aid needed, some 480,000 tonnes be targeted mostly to children, hospital patients and pregnant and nursing women. The remaining cereal shortfall of 574,000 tonnes will be needed to help the general population meet its minimum needs.

The report calls for immediate attention to be “focused on improving agricultural input supplies, mainly fertilisers, spare parts and fuel” to “enable the country to produce enough food to meet its minimum needs.”

“It is imperative that the international assistance to agriculture be increased substantially from its current low levels,” the report said, because “future food security in DPR Korea (North Korea) will crucially depend on solutions that address the major economic difficulties. In the absence of these, even without natural hazards, the food supply situation will remain highly precarious as the productivity in agriculture falls and the capacity of the country to finance commercial food imports dwindles and barter trade becomes a progressively less viable option.”

“Despite favourable weather this year, food production has not recovered sufficiently enough to avert serious food shortages,” said WFP’s Senior Program Coordinator for North Korea, Mr. Saeed Malik, adding, “The food crisis has been compounded by a complete run-down of the country’s economy.”

The natural disasters that struck North Korea from 1995 to 1997, including two years of flooding followed by serious drought and a typhoon, aggravated the underlying structural problems of the economy. The situation worsened further with the loss of favourable economic ties with the former USSR and other centrally planned economies in eastern Europe which had provided North Korea with large amounts of aid and trade benefits.

Today, the agriculture sector faces a lack of spare parts for broken machinery, shortages of fuel, irrigation difficulties and a shortage of pesticides. But, the shortage of fertiliser is the most serious problem for domestic food production, according to the report. North Korea’s three fertiliser factories have a total capacity of over 400,000 tonnes of nitrogen nutrient which could be enough for self-sufficiency, but the factories are obsolete, poorly maintained and face shortages of spate parts and raw materials, mainly fuel, causing fertiliser availability for 1998 to dwindle.

“The capacity of North Korea to provide adequate food for its population is constrained by the shortage of agricultural inputs such a fuel and fertiliser needed to produce food domestically and the reduced capacity of the economy to supplement domestic food production through commercial imports,” said the report, adding: “Food security in the country critically depends on general economic performance and the efforts to increase domestic food production.”

Other recommendations in the report include:

· Rehabilitation and development of the irrigation system and improved water management;

· Crop diversification to enhance soil productivity and reduce risk of crop losses in any one year due to adverse weather conditions;

· Research into effective crop rotation schemes including legumes to promote soil fertility and productivity; and,

· Research on seed improvement, and early and short-maturing and less chemical fertiliser dependent crop varieties.

· In the context of these recommendations, the UN Development Programme-led Round Table in support of Agricultural Recovery and Environmental Protection is an important initiative towards a strategic approach.

UNFAO
11/9/1997

The nutritional situation in North Korea remains fragile in spite of the country’s efforts to redress chronic food problems, United Nations food agencies said today in their latest comprehensive food assessment report.

“Given the scale of the problem and its root causes, future food supply prospects are almost entirely contingent on international food and rehabilitation assistance, economic growth and the ability of the country to integrate itself into the global economy,” the Food and Agriculture Organization (FAO) and World Food Programme (WFP) said in a report on their recent joint mission to North Korea.

“Failing these requisites, food availability and health and nutritional standards will continue to fall markedly,”

Living standards in North Korea have significantly declined in the last four years as the availability of food per person has shrunk, while serious health problems have increased because resources, drugs and essential supplies are unavailable. A vicious circle of poor nutrition compounding poor health and vice versa has become deeply entrenched, the report said.

“Widespread starvation has only been averted by concerted national efforts and the unprecedented volume of humanitarian food assistance provided by the international community,” according to the report.

The mission, which visited North Korea 9-19 October, said the food supply situation “will remain precarious over the next 12 months despite some improvement in rice production this year, due principally to increased fertiliser use, adequate irrigation supplies and the absence of serious pest and disease attacks.”

However, the report cautioned, the gains in rice production were more than offset by the reduction in maize output as the area cultivated fell sharply.

Based on population figures provided by North Korea’s government, grain demand for food and other uses for 1999/2000 is said to be 4.76 million tonnes. This leaves a deficit of about 1.29 million tonnes, of which the government is expected to import 300,000 tonnes commercially. A further 370,000 tonnes is covered by food aid imports in the pipeline, leaving 623,000 tonnes of grain that will need to come through assistance programmes. The food deficit has not significantly changed since the last year’s FAO/WFP crop and food supply assessment mission to North Korea.

According to the FAO/WFP report, there are signs that economic sanctions on North Korea by leading industrialized countries may be further relaxed, which could lead to recovery in the economy and rehabilitation in agriculture. “This inevitably will have a significant and positive impact on sustainable food security.”

UNFAO
10/23/1997

A new United Nations mission leaves today for the Democratic People’s Republic of Korea (North Korea) to assess the outcome of this year’s harvest and evaluate food supply prospects and food aid needs for 1998 following the damaging drought and serious storm this summer.

The mission, mounted jointly by the UN Food and Agriculture Organization (FAO) and the World Food Programme (WFP), is the latest in a series sent to North Korea since the country’s agriculture was devastated by floods in 1995. This year serious drought hit the country in the crucial growing months from June to August, and Typhoon Winnie in late August breached sea defences and caused damaging floods.

The last joint FAO/WFP Crop and Food Supply Assessment Mission in August this year advocated urgent international assistance for North Korea in the form of food, agricultural rehabilitation and vital inputs of seed and fertilizers. “Without these interventions the human consequences are likely to be dire,” the mission said.

The report said the food outlook for 1998 was considerably worse than that of the previous two years of disasters. Domestic production of cereals, even under the most optimistic scenario, would cover less than half the country’s minimum food needs, while imports from commercial channels were likely to become increasingly strained due to growing and chronic economic difficulties and the lack of foreign exchange.

The new mission will estimate the size of this year’s harvest, assess prospects for food supply in 1998 and estimate the country’s food import requirements, including food aid, next year. 

UNFAO
9/12/1997

The United Nations food agencies today expressed “very serious alarm” over food shortages in the Democratic People’s Republic of Korea (North Korea) where drought and a destructive typhoon have aggravated the effects of two years of floods.

“These catastrophic events will undoubtedly have serious and long reaching repercussions in the country’s already grave food supply situation,” the Food and Agriculture Organization (FAO) and World Food Programme (WFP) warned in a report on a mission to North Korea.

North Korea will now have to depend to an even greater extent on international assistance for food, agricultural rehabilitation and vital inputs of seed and fertilizers.

“Without these interventions the human consequences are likely to be dire,” the report said.

The mission, which visited North Korea 16-26 August, said drought has devastated crops throughout the country. Typhoon Winnie caused extensive damage last month to rice in coastal areas in the west where tidal waves destroyed dikes and seawater invaded cropland.

“Guarded optimism expressed earlier for some recovery in food production this year is now replaced by very serious alarm at food security prospects for the coming months and year ahead,” the report said.

In preliminary estimates, pending the visit of another FAO/WFP mission to North Korea in connection with next month’s harvest, the report said the country could lose 1.25 million tons of maize even if there is adequate rainfall this month. With rain, the rice crop could be down by 342,000 tons, without rain by 630,000 tons.

“Imports from commercial channels are likely to become increasingly strained due to growing and chronic economic difficulties and the lack of foreign exchange,” the mission said.

“As the general health of the population has now already been highly weakened by the shortage of adequate food in recent years, especially amongst vulnerable groups, the anticipated shortfall this year is likely to have far-reaching implications that go beyond the devastation of 1995 and 1996.”

WFP, which has been providing emergency food aid to North Korea since 1995, has appealed for donations of US$144.1 million to provide the country with 333,200 tons of food during the period between April 1997 and March 1998. Contributions as of 1 September totalled 322,500 tons or 97 percent of the appeal.

The food is being distributed to 2.6 million children aged 6 or younger, some 250,000 farmers and workers and their 850,000 dependants taking part in flood rehabilitation projects and up to one million hospital patients.

The UN agencies say the ability of North Korea to provide adequate food to its population continues to be hampered by two basic facts: the resources it has available to produce food domestically and the ability of the economy to provide inputs for agriculture and supplement the food supply with imports when there are production shortfalls.

According to the FAO/WFP report, future food security in the country depends as much on general economic performance as on efforts to increase output in agriculture.

UNFAO
6/30/1997

The UN Food and Agriculture Organization (FAO) has launched an international appeal for the supply of about 50 000 tons of fertiliser to North Korea. The fertiliser should be distributed to farmers for rice cultivation for an area of over 500 000 hectares, FAO said today.

Through the delivery of fertiliser within the next six weeks and by latest 25 July for the present planting season, rice production could be increased by about
370 000 tons or 24 percent, according to FAO. The delivery would be co-ordinated and monitored by FAO.

This would ensure a total rice supply for around 60 days. The costs are estimated at $11 million. In comparison, $11 million would cover the costs of only 36 000 tons of rice for the minimum food needs of the population.

Without international assistance North Korea will face “an important fertiliser gap” this year, FAO said. In 1996 only up to 30 percent of the country’s fertiliser needs were covered.

An FAO/World Food Programme (WFP) mission to North Korea reported recently that food rations are running out. Food rations have been only 100 to 200 grams per person per day since early this year, compared to a minimum requirement of 450 grams. Malnutrition has become chronic and life-threatening.

UNFAO
12/6/1996

North Korea approaches 1997 in a far worse position than 1996 and still needs large scale amounts of international food assistance just to meet its minimum food needs, two UN agencies reported Friday.

“Two successive years of floods have undoubtedly set back agriculture and have significantly compounded underlying food production problems in the country”, said the report issued by the UN Food and Agriculture Organization (FAO) and the UN World Food Programme (WFP).

Besides the floods, “economic problems have manifested themselves in falling productivity and output in the agriculture sector”, said the report, which was based on a recent visit to the country by representatives of the two agencies.

The FAO/WFP mission to North Korea also reported that domestic production of fertilizers and imports of essential items — like fuel and spare parts — have fallen drastically in recent years. Food production in North Korea is constrained by geography, land availability, climate and continuous cultivation, which has seriously depleted soils.

“The balance in agriculture can easily be upset by natural calamities, such as the floods in the last two years”, the agencies said. North Korea “can simply not produce enough food grains to meet demand and has a growing dependence on imports”.

The agencies reported that Pyongyang, lacking foreign exchange, burdened with huge international debts and having virtually no access to credit, last year resorted to “desperate measures,” such as bartering badly needed raw materials for grain to cope with the food emergency.

The mission reported that up to half of the country’s 1996 maize harvest and almost all of the potato harvest were consumed early, in August and September, due to severe food shortages. Borrowing part of this year’s harvest in advance means the country has merely deferred the food problem to 1997, the agencies reported.

Overall domestic production of milled rice and maize available for use in this marketing year amounts to 2.8 million tons, 2.3 million tons short of minimum needs.

The critical period will come from July to September next year, the agencies reported. “Only if adequate food assistance is mobilized before the onset of this period, will further hardship in the population be averted”, they said.

The Independent
Terry McCarthy Helen Womack
3/13/1994

SEVERAL hundred North Koreans have escaped from gulag- style logging camps in Siberia. The mass break-out turns a spotlight on the shadowy camps where, Russian journalists say, North Koreans are kept as ‘virtual slaves’ to cut timber in a shameful deal that is profitable to Moscow and Pyongyang.

As many as 150 of the loggers are trying to defect to South Korea, according to government
 sources in Seoul. North Korea angrily denies the reports, describing them as ‘rumour, unfounded propaganda and sheer fabrication’. But one of the escapees, contacted this week in the Russian Far East city of Vladivostok, said economic hardship at home and bad living conditions in the camps were driving many of the loggers to think seriously of defecting.

Park Dong Bok, who comes from the northern part of North Korea, close to the Chinese border, had been working for two years in one of the Siberian timber camps close to the city of Khabarovsk. Although on Russian territory, the 16 camps are run entirely by North Koreans, watched over by Pyongyang’s notorious security police who confiscate passports so workers cannot travel, even within Russia. Russian officials are not allowed inside the camps, despite reports of serious abuses, but they tolerate this because the North Koreans are an exceedingly cheap labour force. A portion of the timber is given to Russia and the rest goes to North Korea.

Mr Park is 36, and like all the lumberjacks in Siberia – estimated at between 15,000 and 20,000 – he has a wife and family back in North Korea. The loggers’ families act as virtual hostages to discourage defection attempts.

Though the workers initially volunteer to come to Russia, conditions are reminiscent of Stalin’s forced labour camps of the 1950s. Life is unpleasant, particularly in the winter when there is no heating – though food rations were better than at home, said Mr Park: the loggers received rice every day, meat twice a month – usually pork imported from China – and grew their own vegetables. In North Korea most people receive meat only on a few feast days, and rice is often replaced with low-quality cornmeal.

But discipline in the camps was harsh, he said. There were frequent beatings by camp guards, and two types of prison: a log house for minor infractions and solitary confinement cells for ‘ideological crimes’, such as criticising the government of Kim Il Sung. The loggers dreaded these prisons: sleep was impossible, rations were reduced, beatings were commonplace and not all prisoners got out alive. The work day began at 5am, and continued until 8pm in the summer, 5pm in the shorter winter days. Rest days were rare. Each logger received one new set of clothes per year, and most worked for three years before returning home. They earned an average of dollars 25 a month (paid in North Korean won), and those able to cut 50 per cent more than their target could earn a maximum of dollars 40 a month.

To supplement their income, some of the loggers secretly distilled alcohol in the forest and sold it to Russians who came to the perimeter fences at night. Russian prostitutes also arrived at night.

Mr Park was driven to defect by news from home. Because his father had retired, his family’s food ration had been reduced, and to supplement their diet his mother started dealing on the black market. She was discovered, and the family was deported to a poor mountain area as punishment. His wife divorced him and took her two children with her.

With nothing to hold him back, Mr Park decided to escape and seek asylum in South Korea. Other North Koreans he worked with escaped because of hardship at home, and the news about the outside world that they received from illicit contacts with Russians. Since South Korea opened a consulate in Vladivostok last year, the North Koreans have made this city their first destination: it is several hundred miles from the logging camps, compared with the 5,000-mile journey to the next South Korean diplomatic post in Moscow.

Mr Park, who speaks a little Russian, is hiding in Vladivostok until his asylum request is processed. He is afraid North Korean agents will track him down. The South Korean government is still debating whether to accept the asylum requests. Normally Seoul receives only a handful every year, from North Korean diplomats in Africa or Asia.

Officials are concerned that, if all the loggers are accepted, many more may flee the camps, upsetting relations with Moscow and the tentative peace talks with Pyongyang.

Russian journalists first brought the plight of the North Koreans to light in 1991. The existence of the camps, which first started operating in the 1950s, has been kept secret, and few Russians know about them.

North Korea’s official news agency betrayed the government’s embarrassment, saying reports of defecting loggers were ‘a malicious abuse and slander’ and ‘an unpardonable insult to the Korean working class, who are masters of the country’.