Archive for the ‘Public Distribiution System (PDS)’ Category

The (Market) Forces of History in North Korea

Friday, October 30th, 2015

By Benjamin Katzeff Silberstein

The market is a common topic for debate in history. How did it impact the rise of the anti-slavery movement in the US and the UK? What impact did economic conditions have in the French Revolution? These questions are, and should be, asked in the current debate about North Korea’s socioeconomic development as well.

But despite the hope of many, the market might not simply be a story of growing individualism and disconnect from the power of the state. While such a trend may well be at work, it could also be the other way around.

This was recently illuminated through an interesting story by Reuters. In a visit to Pyongyang, they took a look at how markets and everyday business transaction function in North Korea at the moment. As they note, it is telling that a reporter from an international news agency can make transactions in the open, with a government minder by his side, at the black market rate. Business that previously had to be done in the shadows now happens in the open:

Shoppers openly slapped down large stacks of U.S. dollars at the cashier’s counter. They received change in dollars, Chinese yuan or North Korean won – at the black market rate. The same was true elsewhere in the capital: taxi drivers offered change for fares at black market rates, as did other shops and street stalls that Reuters visited.

The most obvious conclusion is that the state is adapting itself to the bottom-up development of the market. Indeed, this is the way the story is often told. In this narrative, the government is only reacting to developments and has long lost the economic policy initiative.

But one could also see a government that is confident enough to relax the rules. It just isn’t a certain fact that the state and the market are two opposing entities.

First, connections to the state still seem to be good for those wanting to trade on the market. For example, according to the surveys conducted by Stephan Haggard and Marcus Noland that laid the foundation for Witness to Transformation (2011)party membership is still considered one of the best ways to get ahead in North Korea (or at least it was at the time when the surveys were conducted). A somewhat similar trend can be discerned in survey results presented by Byung-Yeon Kim of Seoul National University at a conference at Johns Hopkins SAIS in late September this year. Kim’s results also indicate that there is a strong positive correlation between party membership and participation in both the formal and informal economy.

Second, the government is making money off of the market. DailyNK recently reported that the fees charged by state authorities for market stalls was raised. They also noted that regulations of the markets seemed to have gotten more detailed over the years. As noted in this report published by the U.S.-Korea Institute at SAIS, the space that the government allocates to markets has consistently increased in the past few years. Not only have official markets grown, many of them have also been renovated and given better building structures.

All in all, this paints a picture of a government that controls markets while allowing them more space to function. It is not clear that formerly black market activity happening in the open means that the market is gaining ground at the expense of the state. They may well be moving together. That is good news for those hoping for stability, but bad news for those banking on a market-induced revolution. Despite the hope of many that the market will cause the demise of the regime, the role of the market force in North Korea’s history is far from clear.


On the availability of Chinese and North Korean rice

Tuesday, July 22nd, 2014

According to the Daily NK:

As volumes of rice bought and sold in North Korea continue to rise, stores operated by foreign-currency earning entities and market vendors are entering into greater competition for customers, inside sources in North Korea report.

“Goods including rice, beans and flour are flowing in steadily from China,” a source from North Pyongan Province explained. “In the olden days the arrival of July would have meant the worst conditions for rice, but this year there have been no big shifts and prices have stayed stable.”

A second source in North Hamkyung Province corroborated the state of affairs, saying,  “Every day a number of freight trucks loaded with rice come in through the customs house at Hyesan, and there’s the smuggled stuff, too.”

“It used to be the norm for rice to retail in the jangmadang [market]Stores only traded it wholesale,” the North Pyongan Province source went on. “But now stores are retailing it, too. Any time rice comes in through customs, buyers are there lining up to take it.”

“Stores” run under the auspices of foreign-currency earning entities began to spring up Pyongyang and other major cities toward the end of 2006. They were given formal permission to sell rice and corn alongside manufactured goods, thus in effect ending the state’s official dominance of domestic grain circulation.

The rice sold in markets comes from two sources: China, and domestic farms.  Stores mostly sell rice originating in China, whereas market vendors tend to purvey rice from a variety of sources, sources say. The ratio of Chinese to North Korean rice sold in public markets is roughly 6:4.

Lower socio-economic groups and restaurants catering to the general public tend toward Chinese rice, which is plentiful and cheap but considered insufficiently glutinous. On the other hand, affluent groups are the main purchasers of rice grown in North Korea. The stickiness of the product is higher, but so is the price: roughly 500 KPW more per kilo than Chinese varieties.

“First to attract customers, and then to turn them into regular visitors, both shops and markets are competing on price and service,” one source explained. “The stores sell their rice for 100 or 200 KPW less than the jangmadang, but customers there cannot negotiate, and the seller never throws anything in for free.”

However, this appears to be changing. According to the source, stores have now begun to grant greater price autonomy to shop officials, allowing for haggling over price and other forms of value-added.

“Customers can negotiate prices and get home or business delivery if they purchase more than 100kg,” one source reported. “It’s just like in the market now. Shops have started providing extra services, and delivery men, eager as they are to earn money, have started crowding outside storefronts waiting for customers where once they would have waited on the road.”

Read the full story here:
Price War as Stores Take on Nimble Vendors
Daily NK
Seol Song Ah


Market prices stable despite lean period

Friday, May 16th, 2014

According to the Daily NK:

Rice prices in North Korea remain stable despite the arrival of the April-May “spring hardship period,” inside sources have conveyed to Daily NK.

Spring months are usually tough because food supplies run low as North Korea, with its relatively low level of external trade in foodstuffs, waits for the early domestic potato harvest at the end of June. This in turn impacts market rice prices; in May 2012, the price of a kilo of rice skyrocketed by 20% in a single month.

However, this year has been a good one. Sources convey that a kilo of rice is trading in Pyongyang, Sinuiju and Hyesan for 3700, 3850 and 3900 won respectively. This is consistent with preceding months, and below the 4000 won mark initially recorded last December.

The price of corn, often used as a cheap substitute by low-income households when rice gets expensive, is also showing a stable or downward trend. At 800-1000 won per kilo, it is 500 won less than it was in April.

Several factors are contributing to this relative stability, a Hyesan source contended. Firstly, work units on cooperative farms are bringing their stores of rice to market in bulk payment for resources for the planting season. Secondly, May has seen a small decrease in the exchange rate, and this has helped to keep the rice price down in terms of imports.

“It’s the spring planting season and work units have to purchase resources like diesel and fertilizer. People say that ‘rice is money,’ and now they’re selling rice they had stored from last year to purchasing farming products. This means there is enough rice in the markets and the price is stable,” the source said.

A Pyongyang-based source also reported stable market prices, as well as consistent state ration delivery in April.

“The authorities have been continually distributing rations and there is sufficient rice in the markets. More people are buying meat including pork because some laborers had a wage increase. The rice price could drop even further,” he assessed.

Nevertheless, experts in Seoul assert that rice prices could be negatively affected by current dry conditions in the country’s western breadbasket zones

Cho Bong Hyun of the IBK Economic Research Institute clarified to Daily NK, “The recent price stability in North Korea’s markets is because of continuous distribution since the release of military rice reserves last year. Expectations around this year’s output could also impact prices further down the line. Some will plan to store rice if they anticipate this year being a lean one, which will in turn drive up the rice price.”

Read the full story here:
Market Prices Stable Despite Lean Period
Daily NK
Lee Sang Yong


UN WFP assistance to the DPRK falls in 2013

Wednesday, January 8th, 2014

According to Yonhap:

North Korea received record-low food aid from the United Nations food agency in 2013 due to sluggish contributions from the international community, a media report said Wednesday.

Some 38,000 tons of food were delivered from the World Food Program (WFP) to the impoverished communist country in 2013, some 30 percent of the agency’s target for the year, according to the Washington-based Radio Free Asia (RFA).

It was less than half the amount sent in the previous year and the smallest since 1996 when the agency began helping the North, the report said, adding it was attributable to the WFP’s failure to raise enough funds to achieve the goal.

The amount of the U.N. agency’s food aid to the North has been fluctuating from some 136,000 tons in 2008, 50,000 tons in 2010, 100,000 tons in 2011 and 84,000 tons in 2012, according to WFP data.

Citing its dark fund-raising prospects in 2014, the WFP told the RFA that most of its factories for producing nutrition biscuits for the people there were on the verge of shutting down in February.

The daily food rations for the people in the North came to some 400 grams per person last year, far lower than the minimum recommended amount of 600 grams and the North Korean regime’s target amount of 573 grams, the WFP said.

North Korea’s food production is estimated to have been at about 5.03 million metric tons in 2013, up 5 percent from the previous year, according to the WFP report posted on its website.

The food security situation, however, is still serious, with 84 percent of all households having borderline or poor food consumption, it added.

The North’s leader Kim Jong-un put an emphasis on food production in his New Year’s message last week, saying “all efforts should go for agriculture … in order to build a strong economy and to improve the people’s livelihoods.”

Here is the UNFAO November 2013 food security assessment.

Here is additional analysis from Benjamin Silberstein.

Here are previous posts on “Food“, “Agriculture“, “International Aid“, “International Aid Statistics“.

Read the full story here:
WFP’s food aid to N. Korea hits all-time low in 2013


PDS distribution up in 2013

Wednesday, August 7th, 2013

According to the Daily NK:

The volume of food distributed under the North Korean Public Distribution System in the first half of 2013 increased when compared to 2012, Radio Free Asia (RFA) reported on the 6th.

According to North Korean submissions to the UN World Food Programme (WFP), the North Korean authorities provided 400g/day between January to May and 390g/day in June and July, a monthly average of 397g/day. This is a 14g increase on last year’s average of 383g/day.

According to the statistics, 66% of the total population of North Korea, around 16 million people, received state distribution of basic foodstuffs. Last year, 400g/day was achieved in April, the 100th anniversary of Kim Il Sung’s birth, but not in any other month.

Conversely, WFP reported that international food aid volumes to North Korea decreased in the first half of 2013. WFP began a new food aid operation for the country last month, but has since failed to reach half of its target support volume.

Last month, WFP supplied approximately 2900t of food to around 940,000 people, including more than 40,000 flood victims. This compares with 3400 tons of food to more than 1,310,000 people in the previous month.

Daily NK has reported on public food distribution on a number of occasions in 2013, noting in particular that the North Korean authorities distributed some stocks of rice ordinarily intended for wartime distribution.

Yonhap also covered the story.

Read the full article here:
PDS Distribution Volumes Rise in 2013
Daily NK
Jin Dong Hyuk


North Korea attempting to revive the food ration system

Thursday, July 11th, 2013

Institute for Far Eastern Studies (IFES)

North Korea is attempting to restart its halted food distribution system. In March, military food provisions were released to the public and food distribution is reported to have resumed on a biweekly basis. The provision of food rations for more than three consecutive months is a rare occurrence.

A North Korean defector organization in South Korea, NK Intellectuals Solidarity, released the following information in their information briefing session: “From June 1, it was confirmed that residents in border cities and towns received food distribution every 15 days, about 470 grams per person a day.”

The foods distributed were mainly from Warehouse No. 2, stockpiled as military food provisions. It is unclear how long the food distribution will last but North Korea appears to be straining itself to revive the food distribution system in order to resolve the food shortage problem.

According to Radio Free Asia, the North Korean government has begun to reissue food stamps, with residents in North Hamgyong Province having confirmed recently the receipt of such stamps.

North Korean economic policy has focused mainly on the agricultural sector and food supply. There appears to be gradual improvement. The price of 1 kg of rice in January was about 6,600 KPW in Pyongyang and by June it dropped to 5,000 KPW. The price of rice is reported to have dropped in other cities such as Sinuiju and Haesan by as much as 1,000 KPW.

However, a South Korean official commented that the food distribution is not equal nationwide, as some regions are left without food rations. He added, “Unless North Korea is able to secure sufficient supply of food, it will be difficult to revive the food distribution system of the past.”

Meanwhile, some have testified that North Korea is leasing farm lands to urban workers in cooperative farms as a means to resolve the food crisis.

Citing an unnamed source in North Korea, NK Intellectuals Solidarity stated that “state-owned collective farm lands are being leased to city workers,” explaining this as a measure to overcome the current food situation as work in factories in the cities also has declined.

NK Intellectuals Solidarity explained that farm lands are being leased on an annual basis and workers in various state factories and enterprises are receiving about 250 pyong (826.4 square meters) of land per employee.

Employees must allocate a portion of their harvest to the state (100g of corn and 50g of beans per pyong (3.3 square meters) and the total yield of harvest will be counted as the total production output of the farm. The expectation is that this method of leasing land of cooperative farms will resolve the food shortages in the cities and improve the food supply of the entire nation.


DPRK distributing grain / Rice price falls

Sunday, April 21st, 2013

According to the Daily NK:

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

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

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

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

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

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

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

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

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

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

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


Food distribution unchanged in April

Tuesday, May 8th, 2012

According to the Daily NK:

The World Food Programme (WFP) has revealed that food distribution by the North Korean authorities in April, the month of Kim Il Sung’s centennial birthday, was on the same scale as in the month before.

According to Radio Free Asia (RFA) yesterday, WFP believes that food distribution to the North Korean people this past April was 400g per day, which is 66% of the 600g per day recommended intake.

Nana Skau, the WFP’s North Korea spokesperson explained, “The food distributed by the North Korean authorities was a mix of rice and corn, and depending on the region the mix was either at 2:8 or 3:7.”

She went on, “In April there were many celebrations including Kim Il Sung’s 100th birthday so a lot of public institutions were either closed or distribution from them went down. The reason why our 83 cases of food distribution in 22 counties was one third of the previous month’s total of 220 cases in 59 counties was also because there were many public holidays.”

Meanwhile, WFP has revealed that aid is still entering the country, announcing that “In April 98.5 tons of food arrived in North Korea and in May 2,700 tons of mostly beans and powdered milk is expected to be sent there.”

Read the full story here:
Food Distribution Unmoved by April
Daily NK
Hwang Chang Hyun


Lankov on the evolution of personal income in the DPRK

Wednesday, April 25th, 2012

Andrei Lankov writes on the history and evolution of personal income in the DPRK. According to his article in the Asia Times:

When one talks about virtually any country, wages and salaries are one of the most important things to be considered. How much does a clerk or a doctor, a builder or a shopkeeper earn there? What is their survival income, and above what level can a person be considered rich?

Such questions are pertinent to impoverished North Korea, but this is the Hermit Kingdom, so answering such seemingly simple questions creates a whole host of problems.

We could look first at official salaries but this is not easy since statistics on this are never published in North Korea. Nonetheless, it is known from reports of foreign visitors and sojourners that in the 1970s and 1980s, most North Koreans earned between 50 to 100 won per month, with 70 won being the average salary.

Read more below…


North Korea redefines ‘minimum’ wage

Wednesday, April 25th, 2012

Andrei Lankov writes in the Asia Times:

When one talks about virtually any country, wages and salaries are one of the most important things to be considered. How much does a clerk or a doctor, a builder or a shopkeeper earn there? What is their survival income, and above what level can a person be considered rich?

Such questions are pertinent to impoverished North Korea, but this is the Hermit Kingdom, so answering such seemingly simple questions creates a whole host of problems.

Read the full story below: