North Korean Economy Watch

UPDATE 1: Luke Herman provides some additional infomration here.

ORIGINAL PSOT: January has been quite interesting for DPRK watchers as we are seeing the steps taken to establish the legitimacy of Kim Jong-un. Below I have cataloged some visible components of this process:

Kim Jong-un’s “on the spot guidance” (OSG):

Kim Jong-un began the year with a visit to Kumsusan palace to pay respects to president Kim Il-sung and leader Kim Jong-il. The political and cultural symbolism speaks for itself.

Kim Jong-un’s second guidance trip (reported on the same day) was reportedly to the Seoul Ryu Kyong Su 105 Guards Tank Division. This visit is symbolically important because it was on a guidance trip to this very same division that (according to the North Korean narrative) Kim Jong-il began his “Songun” (Military First) leadership.  According to KCNA (2010-8-24):

An oath-taking meeting of servicepersons of the three services of the Korean People’s Army took place at the Ssangun-ri Revolutionary Site in Sukchon County, South Phyongan Province, on Tuesday on the occasion of the 50th anniversary of Supreme Commander Kim Jong Il’s start of the Songun revolutionary leadership.

The reporter and speakers at the meeting recalled that Kim Jong Il started the Songun revolutionary leadership by providing field guidance, together with President Kim Il Sung, to the Seoul Ryu Kyong Su 105 Guards Tank Division of the KPA on August 25, Juche 49 (1960) stationed in Ssangun-ri.

Here is a satellite image (Google Earth) of the Ssangun-ri Revolutionary Site (쌍운리 혁명사적지,  39°25’3.20″N, 125°44’30.74″E):

Joseph Bermudez wrote more about the Seoul Ryu Kyong Su 105 Guards Tank Division here. Kim Jong-il last visited the unit on 2010-12-31.

The remainder of Kim’s guidance trips in January have been overwhelmingly military in nature:

KPA Air Force Unit 1017
Concert Given by Military Band of KPA
Flight Training of KPA Air Force Unit 378
Demonstration by Players of Western Area Aviation Club (KPA)
Mangyongdae Revolutionary School (KPA)
Lunar New Year Reception
Machine Plant managed by Ho Chol Yong (KPA)
Kim Jong Un Inspects Command of KPA Large Combined Unit 671
Kim Jong Un Inspects KPA Air Force Unit 354
Kim Jong Un Inspects KPA Unit 3870
KPA Unit 169 honored with the title of the O Jung Hup-led Seventh Regiment
Music and dance performace
Hero Street Meat Shop
Pyongyang Folk Village (KPA)
2012 New Year’s concert “The Cause of the Sun Will Be Immortal” given by the Unhasu Orchestra
Seoul Ryu Kyong Su 105 Guards Tank Division
Tribute to Kim Il-sung and Kim Jong-il at (Kamsusan)

The media/propaganda campaign:

1. On Kim Jong-un’s birthday, KCTV ran a much-written-about, hour-long documentary titled, Inheriting the Great Achievement of the Military First Revolution of (Mount) Baekdu, which highlights Kim Jong-un’s bona fides as a great military strategist (see full video here). It also allegedly mentions Jong-un’s mother, though not by name, who was born in Japan.

At this point I don’t have much to add on the film except a translation of Kim Jong-un’s quote in the film, which may be his first official one, provided by C. La Shure in the Korean Studies Digest:

“I am accustomed to working through the night and so am not bothered by it. The most joyous and happiest moments for me are when I can bring joy to the comrade supreme commander. Thus, though I have stayed up several nights, I have worked without knowing weariness. Even when I work through several nights, once I have brought joy to the comrade supreme commander, the weariness vanishes and a new strength courses through my whole body. This must be what revolutionaries live for.”

2. Kim Jong-un’s “motherly” or “nurturing” traits have also been emphasized — imitating not only Kim il-sung’s appearance but also his public mannerisms (a la Bryan Myers):

Pictured above:  (Top) The cover of B.R. Myers’ book, The Cleanest Race. (Bottom) Kim Jong-un’s visits to KPA Unit 354 (L) and the Mangyongdae Revolutionary School (R)

3. Kim Jong-un has issued several autographs which look remarkably like his father’s (and grandfather’s):

Pictured above: (L) Kim Jong-il’s signature taken from North Korean television. (R) Kim Jong-un’s signature as reported by KCNA on 2012-1-3. The Choson Ilbo also picked up on this.

4. The KCNA web page now has a special content filter built specifically to highlight Kim Jong-un’s activities.  They have also started printing his name in a larger type.

5. Kim Jong-un is now part of the DPRK’s infamous criticism sessions. According to the Daily NK:

“The Central Party is propagandizing the greatness of Kim Jong Eun through criticism sessions, and coming down hard on anybody who is reported to have said anything hinting at any doubt of his greatness,” the source said, adding, “all cadres are being careful not to get caught out by this, without exception.”

6. Kim Jong-un  is being called “father” in the official media.  According to the Daily NK:

Choson Central News Agency (KCNA) on the 25th reported that Kim Jong Eun made a visit to the Mangyondae Revolutionary School. During his visit, Kim Jong Eun was greeted by staff and students as “Dear Father,” a designation stressing loyalty.

Rodong Shinmun, a day before, ran an article entitled ‘The sun shines forever’. It stated “our people broken hearted at the loss of our nation’s Father (Kim Jong Il ) and out of love our father (Kim Jong Eun) warmly welcomed the return of our people from overseas.” This statement showed that Kim Jong Eun has succeeded being called ‘father’ following Kim Jong Il.

The newspaper went on to praise Kim Jong Eun, “our people are all one in our father and persist with single-minded unity and great heart.”

7. The Lunar New Year holiday was co-opted to celebrate the rise of Kim Jong-un. In addition to public ceremonies and performances in honor of one of the three leaders (Kim Il-sung, Kim Jong-il and Kim Jong-un), the practice of distributing holiday rations in the name of the leader was resumed. In a sign of the “back to the future” economic policies which may be on the horizon, the DPRK is rumored to be interested in reviving nation-wide food distribution through the PDS.

8. KCNA announced an amnesty for convicts. Details were scarce.

Institute for Far Eastern Studies (IFES)
2012-1-25

A month into Kim Jong-un’s ascension to power, it is reported that food distribution is likely to resume nationwide in North Korea.

Many experts evaluate this as a symbolic measure to propagate the construction of a powerful economy and improve the lives of the people. For the North Koreans, the most apparent and obvious economic accomplishment is the improvement of the food situation. Thus, North Korea is most likely to take action to normalize food rations as its top priority.

According to a statement made by a South Korean government official on January 20, “Kim Jong-un and his leadership will begin the food distribution as a way to prove to its people about changes forthcoming in the new regime.”He also added, “After years of propagation for the building of a strong and prosperous nation, they must demonstrate it to the people with noticeable results.”

The amount of rations to be provided is still unclear. However, the source emphasized that it was very likely for rice rations to resume, especially with the approaching national holidays, such as the Lunar New Year and Kim Jong-il’s birthday (February 16).

He also commented that “the food distribution will be a nationwide movement and the food ration system will go into effect based on the distribution network of available food supply.”

According to the Food and Agricultural Organization (FAO) and the World Food Programme (WFP), North Korea’s food production in 2011 compared to the previous year rose by 8.5 percent, sitting at about 5.48 million tons (of rough grains or 4.66 million tons of milled grains).

The minimum amount of food consumption in North Korea is 5.4 million tons, but a shortage of about 400,000 tons is expected, including the international food aid and industrial food imports. Among the recent years, this marks the largest deficiency in food supply.

However, such shortages can be overcome with additional food imports and distributing mainly rice reserves.

The last national food distribution in North Korea was in 2005, seven years ago.

North Korea is also likely to exert more effort in food processing production to improve the distribution of daily necessities. With relatively little dependence on raw material imports, North Korea is planning to improve the food situation through expanding the food processing production in agricultural, fishery, and livestock industries, with less competition with Chinese products.

KCNA reported that North Koreans celebrated the lunar new year by paying tribute to Kim Jong-il:

On the lunar New Year’s Day, the Korean people are ardently yearning for the leader Kim Jong Il.
People are seen laying flowers or floral baskets before portraits of smiling Kim Jong Il displayed throughout the country, recollecting the undying feats he performed for the country and the people.
An old man, Ri Thaek Ju, living in Sosong District, Pyongyang, told KCNA, “I don’t think the leader left his people. He is among the people. He is greeting the Lunar New Year with us.”

They also laid floral baskets at Kim Il-sung statues (video here):

Floral baskets were placed before the statues of President Kim Il Sung in different parts of the country on the lunar New Year 2012.
Service personnel and Pyongyangites from all walks of life and school youth and children and overseas compatriots staying in the socialist homeland, visited his statue on Ryongnam Hill to pay tribute to him.

…And they also performed plays offering well wishes to Kim Jong-un:

Schoolchildren’s performance “Country of Eternal Sun” took place at the Mangyongdae School Children’s Palace Monday on the lunar New Year 2012.
The performance began with prelude “Please accept, the dear respected Kim Jong Un, our greetings on lunar New Year.”
The performers made a deep bow to Kim Jong Un, representing the unanimous best wishes of the younger generation of the DPRK.

So there are “three generations” of post-revolution North Koreans, and each one now has their own leader to pay homage to on Lunar New Year. Interestingly, Lunar New Year was banned by the DPRK until the 1980s as it was classified as a Chinese holiday. But why ban a cultural holiday when you can co-opt it for political purposes?

The AP also published this story.

Read more about holidays in the DPRK here.

UPDATE 1: On January 24, KCNA reported that Kim Jong-un hosted a banquet for senior members of the North Korean government.

UPDATE 2: On January 25, the Daily NK reported some very interesting information from within the DPRK which further shows how the Lunar New Year has been co-opted as a tool for the legitimization of Kim Jong-un’s rule:

A Chinese trader who resides in Pyeongseong, North Korea, arrived in Dandong on January 21 for the start of the Lunar New Year holiday period. The trader, who in this article we will call ‘John’, received permission to visit China after waiting over a month to leave the country since the death of Kim Jong Il. John met with his suppliers in Dandong to order items he would take back into North Korea, before departing for Shenyang to visit relatives.

Daily NK met with John in Shenyang on January 22 to ask him whether or not the rations announced by North Korean authorities had actually been distributed as planned. As he is a Chinese expatriate, he says he did not receive any rations this time, however “ordinary people did get them. The rations were half white rice and half mixed-grain rice.”

“Even within Pyeongseong, people got different rations depending on what street or neighborhood they live in – some got 3 days worth, others got 5. Our People’s Unit gave 3 days. But that wasn’t the problem; in one area people got grain rice mixed with corn, and the really unlucky amongst them were disappointed to find that their rations had already gone off.”

“On the way here I also heard from people living in Sinuiju who were given corn soup rather than rice of any sort,” John says. Given that corn soup costs roughly half as much to provide as other grain rations, evidently the government distributed corn-based rations in some cities and counties in order to help carry out its plan.

According to John, authorities also offered to supply fish to citizens. “They handed out coupons to buy a sailfin sandfish for 2,800 won and called this an order from Kim Jong Eun.” With this coupon citizens could head to a government-run store and purchase the fish for 2,800 won, however John says that most people declined to buy from the government-run stores when fresh sandfish could be bought from the market for 3,300 won.

Regarding crackdowns on foreign currency, John said that “It would be hard for people like me to live if the government stopped people using the Yuan. When I purchase stock I have to pay for it in Yuan, so if I wasn’t able to do that I wouldn’t be able to trade. That might end up being the case again. The ‘gruppas’ (inspection teams) are showing up to carry out crackdowns on illegal foreign exchange transactions, but this has just driven most people to do it in the privacy of their own houses.”

“Even people who lose their foreign currency in the crackdowns can get it back with a bribe. How can you stop that? Even cadres like foreign currency, so how can it work if they order a crackdown?”

According to KBS:

The Voice of America reported on Wednesday that the World Food Program said North Korean authorities distributed 375 grams of food to every citizen in December.

A spokesman for the WFP quoted a North Korean government report saying that 200 grams of food were rationed per head in July through September. But it went on to explain that the amount increased to 355 grams in October, 365 grams in November and 375 grams in December.

The North Korean government cited the fall harvest as a reason for the increased food distribution. According to the WFP, the North Korean government aims to raise rations to 380 grams per head.

The WFP distributed 35-thousand-200 tons of food to three-point-one million North Korean people in December last year.

Read the full story here:

N. Korea Increases Citizens’ Food Rations
KBS
2012-01-05

UPDATE 75 (2011-12-5): The ROK will donate US$5.65 million to N. Korea through the UN. According to Yonhap:

South Korea said Monday it will donate US$5.65 million (about 6.5 billion won) for humanitarian projects in North Korea through the U.N. body responsible for the rights of children.

The donation to the United Nations Children’s Fund, or UNICEF, will benefit about 1.46 million infants, children and pregnant women in North Korea, according to the Unification Ministry, which is in charge of relations with the North.

Seoul’s contribution will be used to provide vaccines and other medical supplies as well as to treat malnourished children next year, said the ministry.

There have been concerns that a third of all North Korean children under five are chronically malnourished and that many more children are at risk of slipping into acute stages of malnutrition unless targeted assistance is sustained.

“The decision is in line with the government’s basic stance of maintaining its pure humanitarian aid projects for vulnerable people regardless of political situation,” Unification Ministry spokesman Choi Boh-seon told reporters.

South Korea has been seeking flexibility in its policies toward the North to try to improve their strained relations over the North’s two deadly attacks on the South last year.

Despite the South’s softer stance, North Korea recently threatened to turn Seoul’s presidential office into “a sea of fire” in response to South Korea’s military maneuvers near the tense western sea border.

South Korea donated $20 million for humanitarian projects in North Korea through the UNICEF between 1996 and 2009.

Last month, the South also resumed some $6.94 million worth of medical aid to the impoverished communist country through the World Health Organization.

…

Separately, South Korea also decided to give 2.7 billion won ($2.3 million) to a foundation to help build emergency medical facilities in an industrial complex in the North Korean border city of Kaesong.

UPDATE 74 (2011-12-2): The Choson Ilbo reports that the DPRK’s food prices are rising after the 2011 fall harvest, however, the price increase is not due to a shortage of output, but rather political directives. According to the article:

The price of rice in North Korea is skyrocketing, contrary to received wisdom that it drops after the harvest season. According to a source on North Korea on Wednesday, the rice price has risen from 2,400 won a kg in early October to 5,000 won in late November.

North Korean workers earn only 3,000-4,000 won per month.

This unusual hike in rice price seems to be related to preparation of next year’s political propaganda projects.

A South Korean government official said, “It seems the North Korean government is not releasing rice harvested this year in order to save it up” for celebrations of regime founder Kim Il-sung’s centenary next year, when the North has vowed to become “a powerful and prosperous nation.”

UPDATE 73 (2011-11-24): According to the Daily NK, DPRK television is calling on people to conserve food:

With barely a month left until 2012, the year in which people were promised a radical lifestyle transformation to coincide with the North Korea’s rebirth as a ‘strong and prosperous nation’, programs calling upon people to conserve food are now being broadcast by Chosun Central TV and the fixed-line cable broadcaster ‘3rd Broadcast’.

Chosun Central TV is broadcasting the programs as part of ‘Socio-Culture and Lifestyle Time’, which begins directly after the news on Thursdays at 8:40pm. The majority of the content is apparently now about saving food.

A Yangkang Province source told The Daily NK on Wednesday, “Recently the head lecturer from Jang Cheol Gu Pyongyang Commercial University, Dr. Seo Young Il, has been appearing on the program both on television and the cable broadcasting system, talking about saving food.”

In one such program, Professor Seo apparently noted, “In these days of the military-first era there is a new culture blossoming, one which calls for a varied diet,” before encouraging citizens to eat potatoes and rice, wild vegetables and rice and kimchi and rice rather than white rice on its own, and then adding that bread and wheat flour noodles are better than rice for lunch and dinner.

It is understood that older programs with titles such as ‘A Balanced Diet is Excellent Preparation for Saving Food’ and ‘Cereals with Rice: Good for Your Health’ are also being rebroadcast, while watchers are being informed that thinking meat is required for a good diet is ‘incorrect’.

Whenever North Korea is on high alert or there is a directive to be handed down from Kim Jong Il, both of Chosun Central TV and the 3rd Broadcast are used to communicate with the public. For this reason, some North Korea watchers believe the recent food-saving campaign may reflect a particularly weak food situation in the country going into the winter.

According to the source, one recent program showed a cookery competition involving members of the Union of Democratic Women from Pyongyang’s Moranbong District. During which, one woman was filmed extolling the virtues of potato soup, saying “If we follow the words of The General and try eating potatoes as a staple food, there will be no problem.”

Read all previous posts on the DPRK’s food situation this year blow:

(more…)

Pictured above (Google Earth): An unofficial street market in Sinchon (신천) is bustling while the nearby official marketplace is closed.  See in Google Maps here.

The Choson Ilbo posted a few factoids about the official and unofficial economies of the DPRK:

The rationing system, the backbone of the socialist planned economy, has nearly collapsed. Some 4 million people still live on rations — 2.6 million in Pyongyang and 1.2 million soldiers.

But a senior South Korean government official said 20 million North Koreans rely absolutely on the underground economy.

“A North Korean family needs 90,000-100,000 North Korean won for living costs per month, but workers at state-run factories or enterprises earn a mere 2,000-8,000 won,” the source said. “So North Koreans have no choice but to become market traders, cottage industrialists or transport entrepreneurs to make up for shortages.”

Many stores, restaurants, and beauty parlors are privately owned. Private tutors teach music or foreign languages. Carpenters have evolved as quasi-manufacturers who receive orders and make furniture on a massive scale. They earn 80,000-90,000 won per month on average.

It is common to find people in front of railway stations or in markets who wait to earn a few extra won by carrying luggage or purchases in their handcarts. Like taxis, their fees are calculated on a basic fee and the distance covered.

In the countryside, people earn money by selling corn or beans grown in their own vegetable gardens in the back yard or in the hills. They can harvest 700 kg of corn a year from a 1,600 sq.m. lot. And by selling 50 kg of corn a month they make 30,000-40,000 won on top of their daily living costs.

“Ordinary North Koreans have become so dependent on the private economy that they get 80-90 percent of daily necessities and 60-70 percent of food from the markets,” the security official said.

Noland and Haggard’s recent book, Witness to Transformation, contains thorough and revealing data on market utilization in the PDRK. More here.

According to the AFP:

North Korea has drastically cut public food handouts as it heads towards a new hunger crisis with people again eating grass to survive, one of the most experienced aid workers in the isolated nation said.

Food rations have been cut to as low as 150 grammes (5.3 ounces) a day per person in some parts of the country as foreign donations collapse and higher international prices make imports more expensive, said Katharina Zellweger, head of a Swiss government aid office in Pyongyang.

…

Food supplies to the estimated population of 23 million people have been controlled through a public distribution system for decades.

“It works sometimes and sometimes it doesn’t work,” the head of the Swiss Agency for Development and Cooperation office in Pyongyang told a group of UN correspondents.

“The lowest I heard was 150 grammes per person per day, and I even heard that in Pyongyang the rations are cut to 200 grammes per person per day.”

Diplomats say the rations have been halved over the past 18 months. One hundred grammes of rice produces about 250-350 calories a day, experts said.

Zellweger said she had seen “a lot more malnourished children” on recent travels around the country.

“You see more people out in the fields and on the hillsides digging roots, cutting grass or herbs. So there are signs that there is going to be a crisis.”

At the same time the Daily NK reports:

Anecdotal evidence suggests that the market price of potatoes in North Korea has risen substantially in recent weeks, with farms unable to supply the jangmadang because drought and a lack of fertilizer have had a detrimental effect on this year’s spring harvest.

One farmer from North Hamkyung Province revealed his concerns in a phone interview with The Daily NK on the 26th, saying, “This year, potatoes have not done well because of the drought and fertilizer situation, so I have nothing to sell in the market. I am worried about what we are going to do until the corn comes in August.”

Spring potatoes harvested in early June are a decisive food for North Korean farmers. They receive their share of the autumn harvest in December, but once the People’s Army has received its share and various debts have been repaid, they only get enough food for three or four months. After this, potatoes are an important staple to see them through until corn can be harvested in July and August.

However, after deducting cost incurred in bringing together seeds, fertilizer, agricultural chemicals, farm machinery, irrigation equipment and fuel, a farmer receives distribution depending upon his individual work points, decided according to his/her working hours. Since deductions are high, the share for farmers is low, sources say.

The price of potatoes has even risen sharply in Yangkang Province, the center of North Korean potato production. According to Yangkang Province sources, potatoes there are currently selling for between 900 and 1,000 won/kg, double the price of last year.

Fortunately, the high price of potatoes has not had any influence on rice prices. According to one source, “Rice is being sold steadily, and the price is stable not rising.” In the market in Hyesan, rice is now on sale for between 1,900 and 2,100 won/kg, not much more than it was before the spring shortages began.

Finally, new video footage smuggled out of the DPRK suggested that food supplies are particularly tight in distant towns, even for soldiers:

“Everybody is weak,” says one young North Korean soldier. “Within my troop of 100 comrades, half of them are malnourished,” he said.

The DPRK has requested food aid this year, but donors have been reluctant to meet their demands for a number of reasons.  See related stories here.

According to the Chirstian Science Monitor:

A central question is whether North Korea needs emergency shipments as called for by the World Food Program. Yes, Ms. Park acknowledges, “The problem this year is changed by flood and winter cold,” but the widespread view here is that North Korea basically has enough food.

It’s believed that North Korea wants to stockpile food for celebrations planned next year to mark the 100-year anniversary of the birth of the late Kim Il-sung, the long-reigning “Great Leader” who died in 1994 after passing on power to his son, current leader Kim Jong-il.

“There’s a need, but we don’t know how great it is,” says a knowledgeable western observer. “My hunch is it’s less about a shortage of food and more about unequal distribution. You can buy rice in the markets if you have the means.”

…

South Korean leaders appeared relieved when Secretary of State Hillary Clinton recently made it clear that the US did not believe North Korea had addressed “serious concerns about monitoring” food distribution. The US still wants to know what happened to 20,000 tons of rice that’s strongly believed to have gone to North Korean soldiers when a US food aid program was suspended two years ago.

And on June 30, Yonhap reported:

North Korea imported more than 50,000 tons of grains from its key ally China in May, an expert said Thursday, amid chronic food shortages in the North.

The North purchased 50,328 tons of corn, flour and rice in May, up 31.5 percent compared to the same period last year, said Kwon Tae-jin, a North Korea expert at the Korea Rural Economic Institute.

The North also imported 114,300 tons of fertilizer from China in the first five months, a rise of 39 percent compared to the same period last year, Kwon said, citing figures from Seoul’s Korea International Trade Association.

China is the North’s last remaining ally, key economic benefactor and diplomatic supporter.

According to Daily NK:

Things are growing more difficult for many North Korean people as they pass through the spring lean season, according to a new interview with a citizen from the edge of Pyongyang, Kang Mi Soon. There has been little distribution this year, even in the capital, which has traditionally received preferential treatment, and while people are trading to try and improve matters, it’s not easy at the moment.

This is because, as a lingering after-effect of the currency redenomination, a lot of people have exhausted their reserves of cash, while prices have returned to levels commensurate with before the redenomination. In spite of relative commercial freedom in the jangmadang, the number of transactions has fallen and the class of small traders which lives day-to-day is struggling.

Kang, who hails from Gangdong County in Pyongyang, revealed this and more news from the city in an interview she gave to The Daily NK in Yanji, where she recently visited relatives,

The following is a transcript of the interview with Kang:

- What is the state of the distribution system?

In December last year and then January this year, there were eight days-worth of distribution. In February there were ten days, including the 16th (Kim Jong Il’s birthday), but in March there was no distribution. In April there were five days, including the Day of the Sun (Kim Il Sung’s birthday).

(One day of distribution ordinarily means 700g of rice or other grain for laborers, 900g for miners and workers in other strategic industries, 800g for members of state security, 400-500g for students (depending on grade) and 300g for housewives)

- Is the jangmadang operating well?

The jangmadang is working normally. However, the situation is that though the number of sellers is on the rise, people do not have money so products are not selling well.

- What things are selling the most?

Mostly, rice and corn are the mainstays of jangmadang sales. Since February of this year, there has been a drastic reduction in sales of other household items and industrial products. Though the supplies of rice and corn in the jangmadang are similar to last year, the number of buyers and the amounts being bought are both decreasing.

- What is the overall situation in terms of prices?

Overall, they have risen to a level similar to that of before the redenomination. In the case of Chinese products, prices have increased to more than before the redenomination. Socks made in China were 1,500won before, but now they are 2,000won.

- They say that the food situation during the spring lean season is hard. Can you tell us more?

Starting from last year, after the currency redenomination, the situation started getting worse, and this year it is really bad.

- Has anyone starved to death?

In Gangdong [Kangdong] County, since the beginning of February about twenty people, including two families which committed suicide, have died of hunger.

(Gangdong County had a population of 221,539 in 2008)

- What is the overall food supply situation?

60% of people in the county are living off three meals a day of corn porridge or corn flour noodles, 30% on corn rice and the remaining 10% are eating three meals of rice a day. In March and April of last year, the number of people eating three meals of rice was 30 or 40%, and less than 5% were living on corn porridge or noodles; the rest are corn rice.

- What about other regions?

With the exception of central Pyongyang and other big cities (Sinuiju, Pyongsung, Chongjin etc), it seems to me that other rural regions are in the same situation as Gangdong. The price of rice looks likely to stay the same or rise, and so, until around June 10th when the potatoes are gathered, the numbers of starving people is likely to rise.

Read the full story here:
Gangdong County Hit by Spring Shortages
Daily NK
Choi Cheong Ho
2011-5-17

The The UN World Food Prgram’s Rapid Food Security Assessment Mission (RFSA) offered some exchange rate data that I thought was worth pointing out:

Currently the official exchange rate is about USD1=KPW100 yet the market rate is closer to USD1=KPW3000. In other words, the redenomination of the national currency that occurred in November 2009 is all but neutralized. The effects of this policy on ordinary citizens appear to be mixed where people with over KPW 100,000 lost their savings. The purpose of such a policy was to control inflation by reducing money supply and to curb the growth in private enterprise. Worker salaries remained the same, but prices were reduced significantly.

The PDS prices were revised downwards in the wake of the currency revaluation making it even more affordable, at least in principle. For example, PDS prices of rice declined from KPW 44 to KPW 24 per kg and maize declined from KPW 24 to KPW 14. At these low prices the issue is the lack of commodities in the market, rather than consumers lacking money to purchase them.

An average worker makes around KPW 3,000 to KPW 4,000 per month. This translates into a dollar per month which only works in DPRK because everything is heavily subsidized and ordinary citizens do not rely on direct purchases of imported commodities. If PDS were to run out of cereals at the end April, people would not have the means to purchase cereals on the black market, where prices are KPW2000 per kilogram of rice and about KPW 1000 for maize. It is highly doubtful that the barter system which is the backbone of this informal economy will be able to withstand a shock of this magnitude over more than a couple of weeks. A humanitarian crisis is the likely outcome of such a series of events.

First, Kim Song Min  (김성민), founder of Free North Korea Radio, has posted another clandestine video of a North Korean market:

You can (probably) see the ten-minute video here.  It will not work in China.  Again, the market is surprisingly ordinary; lots of fish, potatoes, and greens.

I posted a similar video several weeks ago which you can see here.

Secondly, the March 24th WFP/FAO/UNICEF Rapid Food Security Assessment Mission (PDF of the report here) included some interesting information on the DPRK’s markets:

5.2. Markets
The mission had unprecedented access to markets in the country. All teams spent a considerable amount of time surveying different markets and their attributes. In DPRK there are three main types of markets where people can buy food and non-food stuff: 1) State Shops; 2) Farmer’s Markets; and 3) City Markets.

State Shops
State Shops are open seven days a week to provide families with such essentials like the soyabean sauce, soya-bean paste, and cooking oil at discounted prices. Each household is assigned to a state shop and, for certain commodities, is entitled to a monthly quota that is set by the Ministry of Commerce. Essential food items include: soya-bean sauce (50 grams /person/day); soya-bean paste (30 grams/person/day); and cooking oil (20 grams/person/day).

Whether households can purchase their full allocation primarily depends on availability. For example, many households reported that soya-bean oil has not been available since early February. Others households informed that meat is only available on special occasions like the New Year or the birthdays of Kim Il Sung (15 April) and Kim Jong Il (16 February).

The Peoples Neighborhood Unit (PNU) [Inminban] announces when new supplies arrive and informs the household’s entitlement. Payment is collected from the households and tokens are issued, specifying items and quantities that can be collected from the state shops.

The variety and quantity of food and non-food commodities varies from county to county. Some shops were observed to have other food items for sale, such as wild vegetables, biscuits and salt. The mission observed that State Shops in rural areas have fewer commodities available than those in large urban centres.

The mission also observed non-food commodities in State Shops, including: school supplies, clothes, shoes, blankets, kitchen utensils, ceramics, cigarettes, beer, rice wine, children’s toys, and single-band radios.

Farmers Markets
The Farmers’ Markets occur every ten days or three times each month. Sellers bring their food and non-food produce to the market where they pay a fee of KPW10 to secure a two meter stall for the day. The sale of cereals is officially prohibited. The mission did not observe any cereals being sold. The main food items observed in these markets were vegetables, potatoes, fruits, eggs, meat, fish, lentils and spices. Non-food items included basic farming equipment, woven baskets, school supplies, clothes, knitted socks and gloves.

Any exchange of cereals between households is privately done through barter trade or households who are PDS [Public Distribution System] dependants get cereals as gifts from relatives and friends in Cooperative farms. The surplus cereal produced by the farmers over and above their grain allocation for home consumption has to be sold to the State Food Procurement Agency.

Some sellers were able to quote terms of barter trade including: two kilograms of maize can be exchanged for one kilogram of rice; one kilogram of fish can be exchanged for one kilogram of rice; one-half kilogram of pork meat can be exchanged for one kilogram of rice; and five eggs can be exchanged for one kilogram of rice. Sellers were hesitant to quote rice and maize prices in KPW other than what is paid through the PDS.

Interestingly sellers only brought commodities in small quantities despite the fact that these markets happen only three times a month. The number of sellers out numbered the buyers but that could be the mission effect as people were wary of foreigners asking questions, particularly outside Pyongyang. The difference in the prices paid in these rural markets compared to Tongil market in Pyongyang was astounding. A bundle of spinach that cost KPW 20 in rural market was being sold for KPW 1000 in Tongil market—50 times more. However, this may not be of concern to ordinary citizens as Tongil caters more to the foreigners and DPRK elite.

City Markets
City markets are held daily in cities and often in the same structures as the farmers markets.Mission members did not observe any cereals for sale in the market. Food items observed were potato, vegetables, pulses, wild vegetables, seafood, fish, eggs, and meat, including rabbit, chicken, and duck. Non-food items included farming tools, baskets, brooms, school supplies, clothing, and other household items. Commodities were available in small quantities speaking to the size of the market. The prices in these markets were competitive and the produce similar to the farmers market.

Finally, Yonhap reports on the travels of a British Envoy to the DPRK:

Martin Uden, Britain’s ambassador to South Korea, said Sunday that a marketplace in Pyongyang, the capital of North Korea, appear to be stocked with large amounts of food, poultry and electronic products, despite the communist state’s ongoing search for food aid abroad.

Uden, who traveled to Pyongyang and Wonsan, a port on North Korea’s east coast, from March 11-14, said he witnessed plenty of chicken, fish and vegetables and an array of computer and camera accessories during his visit to the “Dong-il” market in the capital city.

In his travelogue that was written after his second trip to the North following the first in 2008 and sent to Yonhap News Agency, Uden said that overall, both the variety and quantity of food products available at the Pyongyang market were a “fair bit less” compared with three years ago, noting the absence of beef was especially noticeable.

“This March, I saw no beef and a tiny amount of pork. But plenty of chicken of all sizes, both cooked and uncooked, and some duck. Large amounts of good-looking fish and plentiful root vegetables,” the British diplomat said in his travelogue that offers insights into the daily life of ordinary Pyongyang citizens.

“In terms of the food aid that the DPRK is seeking at present, it’s worth remembering that even if this one market appeared reasonably stocked, it’s not possible to draw wider conclusions from that,” he said, using the abbreviation of the North’s official name.

Uden said he arrived in Pyongyang on the second Friday of March, the day of a devastating earthquake and tsunami in Japan, but was kept in the dark about the disaster until Monday, when the state news organizations carried reports about it. He called the incident an eloquent example of information control by the government.

“In (North Korea), you can only know what the state wants you to know,” he said.

The full text of his travelogue can be found here.