North Korean Economy Watch

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:

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Pictured above: Kim Jong-un delivers his first public address in Kim Il-sung Square

You can watch the video of the entire speech on YouTube here. And just for fun, here is a link to Kim Jong-il’s only public address which I posted to Youtube last year. I also posted this video of Kim Jong-il speaking at a meeting with South Korean president Roh Roh Moo-hyun.

UPDATE 2 (2012-4-25): The Institute for Far Eastern Studies (IFES) has posted some analysis of the speech:

Kim Jong-un’s first public speech: New direction for economic policy stressed
Institute For Far Eastern Studies (IFES)
2012-4-25

Kim Jong Un, the first chairman of the National Defence Commission of the DPRK, made his first speech during a military parade to commemorate the centenary of the birth of his grandfather, Kim Il Sung.

The Rodong Sinmun, the official newspaper of the Central Committee of the Workers’ Party of Korea, released an article on April 19 with the details of the speech.

In the article, Kim Jong Un emphasized, “songun is our autonomy, dignity and life” and pledged to uphold the songun politics to continue the teachings of his father, Kim Jong Il.

Kim Jong Un also underlined that the most important national agenda is becoming a powerful nation through improving the national economy, and resolving the food shortage problem. In addition, he stressed that strong knowledge-based economy must be built by way of new industrial revolution.

The economic policy Kim Jong Un set forth involved resolving the food crisis for the people, development of light industry, transition to a powerful knowledge-based economy, land management, and improvement of cultural and education projects. The Cabinet will be directing the new economic plan. The details of the plan are as follows:

First, in order to resolve the food issue, agricultural production should be improved through investment and technological assistance from the state level. Grain yields should be increased to reach the grain production goals to normalize food distribution for the people.

Second, light industry must be reinforced to resolve the shortages of daily necessities. Specific measures should be established to secure raw materials and to improve the quality to elevate the demand of North Korean products.

Third, housing, food, fuel and other issues related to livelihood must be given priority to improve the quality of life for the people.

Fourth, basic industrial sectors must be developed to build a strong foundation for economic development which can lead to advance production in all areas of the people’s economy.

Fifth, power, coal, metal, and railway system should lead the way to revitalize the people’s economy and stabilize the lives of the people. In particular, power production must be drastically increased and distributed in order to effectively improve the quality of life and monitoring and control must be reinforced.

Sixth, the nation must be established as a strong knowledge-based nation. It was acknowledged that the world is quickly transitioning to the informatization of the economy and North Korea must develop the national economy and build an economic structure that meets international demand. Science and technology should be the forerunner to incorporate science and technology with production and resolve all problems in the economic development process from the science and technology aspect.

UPDATE 1 (2012-4-18): Martyn Williams somehow managed to put up a full English translation of the talk.

ORIGINAL POST (2012-4-15): KCNA reports on the speech:

Kim Jong Un Speaks at Military Parade

Pyongyang, April 15 (KCNA) — The dear respected Kim Jong Un made a congratulatory speech at the military parade celebrating the centenary of the birth of Generalissimo Kim Il Sung.

In his speech Kim Jong Un said that the military parade is a great festival of victors which was provided according to the noble intention of leader Kim Jong Il and on his direct initiative to glorify forever the feats Kim Il Sung performed in the army building and demonstrate the might of the socialist power before the world.

Kim Il Sung, who directed primary efforts to strengthening the revolutionary armed forces in the whole period of his protracted revolutionary activities, worked such military miracle in the 20th century as defeating the most ferocious two imperialisms in one generation, trained the Korean People’s Army into a match-for-a hundred revolutionary army, put all the people under arms and turned the whole country into a fortress, providing a strong military guarantee for the sovereignty of the country and the eternal prosperity of the nation, he noted.

Kim Jong Il, who regarded it as his lifelong mission to carry forward and accomplish the Songun revolutionary cause of Juche pioneered by Kim Il Sung, ushered in the greatest heyday of the development of the Korean revolutionary armed forces with his extraordinary wisdom, outstanding commanding art and matchless grit, he said, and went on:

The Korean revolutionary armed forces have fully demonstrated the might of the powerful revolutionary army distinct in its revolutionary nature and strong in its militant spirit and might under the care of Kim Il Sung and Kim Jong Il.

The military and technical superiority is no longer a monopoly of the imperialists and gone are the days when the enemies could threaten and blackmail against the DPRK with A bombs.

The far-reaching strategy and final victory of the Korean revolution lie in advancing straight along the road of independence, the road of Songun and the path of socialism indicated by Kim Il Sung and Kim Jong Il.

It is the firm resolution of the Workers’ Party of Korea to enable our people, the best people in the world who have remained loyal to the party, overcoming all difficulties, to live, without tightening their belts any longer, and fully enjoy wealth and prosperity under socialism.

The WPK and the DPRK government will join hands with anyone who truly wants the reunification of the country and the peace and prosperity of the nation and make responsible and patient efforts to accomplish the historic cause of national reunification.

The sun’s flag of Kim Il Sung and Kim Jong Il will fly forever before the ranks of the Korean revolution demonstrating victory and glory only and will always encourage us to win fresh victories, he concluded.

More below…

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According to the Daily NK:

The North Korean authorities have ordered Party cadres to ensure the distribution of at least fifteen specific products to the people to celebrate this weekend’s 100th anniversary of the birth of Kim Il Sung. Local cadres are trying everything to meet the target, having been made aware that success or failure will be taken as a measure of their Party loyalty.

According to a source from North Hamkyung Province, the fifteen compulsory items on the list are: glutinous rice (2kg), soybean oil (1kg), pork (2kg), sugar (1kg), soju (2 bottles), fish (1kg), snacks (1kg), candies (1kg), 10 eggs, fruit (1kg), seaweed or Chinese cabbage (2kg), bean sprouts (1kg), wild herbs, soap and toothpaste. The list stands in stark contrast with ordinary years, when distribution generally consists of two or three products, frequently including alcohol and soybean oil.

Moreover, there are plans to ensure that items including soap, towels, socks and shoes are available for purchase from state stores at low prices.

“Party secretaries in factories are totally lost; I mean, they have received the special instructions but haven’t been given any money,” a source from North Hamkyung Province told Daily NK last night. “Some are borrowing the money, while others are even collecting it from their workers to buy pork in the market. Bean sprouts are being cultivated privately by factories.”

However, the source also relayed news of trading organs that have been doing well in the run-up to the holiday period adding items to the distribution list, including Chinese DVD players worth more than $100 and Chinese-made bicycles worth up to $180.

The authorities have also reportedly mobilized the Union of Democratic Women to produce cabbage and spinach in vinyl greenhouses. Women have also been ordered to gather wild herbs from local mountainsides.

Read the full article here:
15 Items on 4.15 Distribution List
Daily NK
Choi Song Min
2012-4-11

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

According to the Daily NK:

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

2. Seeking Cures to North Korea’s Environmental Ills

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

According to Swissinfo:

Agape international is a Swiss charity with about 60 development and aid projects on the go in 15 countries. It has been active in North Korea since 1995, where its focus is agriculture and energy.

Burckhardt travels to North Korea a couple of times a year and has even lived there for up to a few months at a time. Despite his knowledge, he has experienced ageism personally.

“As long as you don’t have grey hair, you cannot tell an older person to do something. I can make suggestions, but I cannot tell someone what to do,” Burckhardt told swissinfo.ch.

Agri-challenged
One area where North Korea has really needed advice is agriculture. After initial donations of food to help fight the famine of the mid-1990s, Agape has been helping local farmers improve their techniques.

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According to Rodong Sinmun (DPRK):

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

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

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

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

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

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

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

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

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

See additional information on these projects here:

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

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

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

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

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

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

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

Institute for Far Eastern Studies (IFES)
2012-3-15

The economic trade between China and North Korea has been robust since early this year. China’s Ministry of Commerce announced on February 29 that bilateral trade between the two countries just in January 2012 reached 418 million USD, an 18 percent jump over the same period last year. North Korea’s exports to China increased 7 percent to 139 million USD, while imports also increased 24 percent to $278 million USD.

Coal is North Korea’s largest export item to China — totaling almost half of total exports — and the total export sales are roughly worth 70 million USD. In contrast, crab and seafood exports to China were greatly reduced. This can be analyzed as one of North Korea’s measures to stock up on food to provide to its residents for the upcoming centennial birthday celebration of Kim Il Sung on April 15 (otherwise known as the Day of the Sun in the DPRK).

However, North Korea’s rice imports from China this past January plummeted 90 percent against the previous year. China’s Ministry of Commerce announced in the January 2012 Agricultural Import-Export Statistical Report that North Korea imported 614 tons (236,000 USD) in January compared to 18,140 tons (630 million USD) the same month last year, a drop of more than 94 percent. On the other hand, corn imports — the most popular grain import from China — tripled to 1,809 tons (596,000 USD) compared to last year’s import figure of 600 tons (174,000 USD).

Upon evaluation, China’s exports to North Korea appear to have increased one billion USD every three years. Based on the data collected from Chinese customs, the Korea Trade-Investment Promotion Agency (KOTRA) analyzed that China’s exports to North Korea were reported to have steadily increased from 1.08 billion USD in 2005, 2.03 billion USD in 2008, to 3.10 billion USD in 2011.

The major export items of China were crude oil and minerals, machinery, electrical equipment, vehicles and parts, and plastic products. These five categories showed steep growth from 30 to 60 percent against the previous year. Last year, China exported crude oil worth 518 million USD and petroleum products valued 192 million USD, which is a 59.1 percent and 83.4 percent rise, respectively.

In addition, 46.8 million USD of aviation kerosene and 58.31 million USD of aviation gasoline were exported to North Korea. Other export items such as fertilizers (134.4 percent) and grains (71.2 percent) steadily increased every year. KOTRA also confirmed China’s trade with North Korea peaked both in exports and imports last year, and the total trade volume towered at 5.64 billion USD. Last year, China’s exports to North Korea totaled 3.17 billion USD and imports from North Korea were 2.47 billion USD.

Trade regions that demonstrate robust economic activities include not only Dandong and Shinuiju but Hunchun, Rajin-Sonbong (currently being jointly developed) and Yanji (China)-Namyang (North Korea) areas. Trade volumes are increasing centered around these areas with expansion of bilateral economic cooperation projects and import of North Korean underground resources. Yanbian Prefecture put forth construction plans to build a new Tumen River Bridge connecting the two countries from this year, announcing the desire to continue to promote trade and economic cooperation with North Korea.

This week, KCNA announced the following:

The Korean Association of Cooks has opened “Korean Dishes”, an Internet homepage.

The homepage deals with common knowledge and theories on variety of dishes and how to cook them.

It also offers such data as origins and anecdotes about dishes and global trend in cooking development.

It has a distinctive catalogue for serving housewives’ convenience. When a visitor chooses any food material in the
catalogue, she can get detailed information about lists of dishes prepared with it and their cookery.

The homepage contains multimedia on national and foreign dishes. Through homepage visitors can exchange their knowledge and views with each other and acquire a wide-ranging cooking.

An official of the Korean Association of Cooks told KCNA that this homepage serves as a close companion for cooks and housewives.

Although the KCNA story does not mention the URL, it is nearly visible on the screen shot taken in the top left photo.  I talked about it with Martyn Williams (check out his database of North Korean web pages here)  and we agreed that it is http://www.cooks.org.kp/index.php. This web page, however, is not actually available on the “world wide web”. It appears to be available only to readers of the DPRK’s intranet, Kwangmyong, which is available through domestic computer terminals and I believe partially through the KoryoLink 3-G phone network.

Some other points of interest:

1. The screen shots indicate that that the North Korean intranet web pages are compatible with the Mozilla Firefox browser.

2. The North Korean intranet pages are prefixed with “http://www.” indicating that though they are not currently on the global Internet, it would be very simple to make them so. This means that the computer programmers in the DPRK are building the network with an infrastructure that would not preclude eventual unification with the global Internet.

Additional Information:

1. Read Martyn William’s analysis of the web pages here.

2. The indispensable STALIN Search Engine provides past KCNA articles on the “Korean Association of Cooks“.

Following the US – DPRK nuclear / food deal announced at the end of February, the DPRK has decided to reject humanitarian assistance from private South Korean organizations. According to Yonhap:

North Korea has apparently decided not to accept humanitarian aid by South Korea’s private relief agencies that comes with monitoring, aid officials here said Monday.

North Korea has said it will only accept “pure” humanitarian aid from South Korea, in an apparent rejection of aid with strings attached, an aide official said of his recent contact with his North Korean counterpart.

Another South Korean private aid official also made a similar comment. The two spoke on condition of anonymity, citing policy.

The North’s move came as North Korean and U.S. officials held talks in Beijing last week to work out details of 240,000 tons of U.S. food aid reached in their recent nuclear deal.

South Korea has called for monitoring of its food aid to the North to ensure that the aid reaches its intended beneficiaries in the isolated country.

…

In November, North Korea allowed a South Korean official to travel to the North for a rare monitoring of flour aid by a South Korean private organization.

Last year, South Korean civic groups donated nearly 3,000 tons of flour to North Korea and some of the civic groups sent monitors to the North to try to ensure the transparency of the distribution of their food aid.

Despite the North’s alleged rejection of aid with strings attached, a private aid official said his group plans to send food aid to the North this year.

“We plan to conduct monitoring in an appropriate manner through consultations with North Korea,” the official said. He asked not to be identified, citing policy.

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

Read the full story here:
N. Korea said to reject S. Korean food aid with strings attached
Yonhap
2012-3-12