North Korean Economy Watch

AFP
Philippe Agret
5/21/2007

After being ravaged by famine in the 1990s, North Korea again faces serious food shortages, with a UN official based here saying that politics are making things worse.

On the road from the capital Pyongyang to Kaesong in the south, every hill lot is developed for agriculture, with all farm work done by hand.

But only 17 percent of the land in North Korea is arable, one of the lowest ratios in the world, according to the UN’s World Food Programme (WFP).

“North Korea is suffering a chronic food shortage due to structural problems and limited food imports and food aid,” said Jean-Pierre de Margerie, the WFP’s representative in the communist state.

He lamented the international community’s lack of commitment to North Korea amid the deadlock in six-nation talks on disarming Pyongyang, and what some consider to be “hidden sanctions” linking a large part of aid to politics.

“There is no evidence that holding back food or humanitarian aid destined to civilian populations would have an impact on the government or its behaviour,” he said.

North Korea’s worst period came from 1995 to 1999 when drought, flooding and the disappearance of Soviet aid led to a famine that killed between 800,000 and two million people, according to independent estimates.

The scars of the famine still run deep, with a 2004 United Nations study finding that 37 percent of North Korean children suffered chronic malnutrition.

Some experts use the term “7, 8, 9, 10″ — as an adult, a seven-year-old born during the famine will be eight kilograms (18 pounds) lighter, stand nine inches (23 centimeters) shorter and live 10 years less than a South Korean of the same age.

The groups most at risk are young children and women who are pregnant or breastfeeding.

After a record harvest in 2005, 2006 was “very difficult” due to heavy floods in the summer and a dramatic drop in food aid and food imports; 2007 could also be dire, de Margerie warned.

Amid the international furore over Pyongyang’s nuclear and missile tests last year, China reduced its aid by half and        South Korea temporarily halted shipments.

Seoul has since resumed fertiliser aid and promised to provide 400,000 tons of rice to North Korea starting in late May.

But the food aid is linked to political conditions, such as Pyongyang shutting its nuclear reactor in line with a multilateral disarmament deal reached in February.

The impoverished country faces a shortfall of one million tons of food this year, or 20 percent of its needs, according to the WFP and the UN’s Food and Agriculture Organisation.

Up to one third of North Korea’s 23 million people may need assistance ahead of the next harvest, warns the WFP.

So is there a danger of another famine?

“No, not yet,” said de Margerie. “But if the trend continues, pockets of severe malnutrition could develop.”

In Pyongyang, not everyone is pessimistic as there is a lack of reliable agricultural data. Some observers say the problems lie in the distribution system and access to food, rather than in actual production.

North Korea’s leaders — whose ruling motto is “juche,” or self-reliance — say they have made food security their priority, but Pyongyang has nonetheless relied on foreign help.

The WFP has collected two billion dollars in 10 years, supplying four million tons of food between 1995 and 2005 that assisted one-third of North Korea in its biggest operation at the time.

Since 2001, multilateral aid from the WFP has been gradually replaced by assistance from China and South Korea. While bilateral aid goes to the government and may be distributed to the elite, the WFP says it closely monitors its aid so that it reaches those most in need.

This year, donor countries have promised only 12,000 tons of food.

The WFP has received only 20 percent of the financing for its programme up to March 2008, assisting three percent of the population, or 600,000 people, instead of the initial objective of reaching nearly two million North Koreans.

De Margerie says he hopes the international community will set aside political concerns to focus on the human tragedy unfolding in North Korea.

“You only see negative images of North Korea. But it has a human face,” he stressed.

“An eight-month-old child or pregnant woman does not engage in politics. It’s the most vulnerable in the civilian population who pay the price.”

Bloomberg
Bradley Martin
5/16/2007

For decades, tourists visiting North Korea have been brought to a 200-room, 70,000-square-meter palace completed in 1978 that displays presents to Kim Il Sung, the “Great Leader,” who died in 1994.

Starting with Joseph Stalin’s 1945 gift of a bulletproof railway carriage, the items include a stuffed bird from American evangelist Billy Graham and a piece of the Berlin Wall donated by a German writer.

These days most visiting foreign dignitaries bring gifts for Kim’s eldest son and successor, Kim Jong Il, 65. The junior Kim’s loot is housed in a 20,000-square-meter (215,278-square- foot) annex that was completed in 1996 — a time when a famine was starving tens of thousands of North Koreans.

Why would the country have spent vast sums on four-ton bronze doors and polished marble floors? “Our people couldn’t display all these precious gifts in a poor palace,” says tour guide Hong Myong Gun. “So we built this palace with our best.”

The gifts in the windowless “International Friendship Exhibition” at Mt. Myohyang, a two-hour drive north of the capital, Pyongyang, range from the trivial to the grandiose.

Cable News Network founder Ted Turner donated paperweights with the CNN logo. A tribal chief in Nigeria offered a throne featuring carved lions, with matching crown and walking stick. Romanian communist dictator Nicolae Ceausescu brought the stuffed head of a bear he had hunted and killed.

Giving and Receiving

In Asia, the protocol of gift-giving has been well established since Chinese emperors began expecting visitors to bear tribute. The Chinese know how to give as well as to receive: Pride of place in the exhibit goes to one of their presents, a life-sized wax figure of Kim Il Sung standing on a three-dimensional representation of a lake shore.

Reverent music, calculated to induce bowing, plays in the background of the posthumous gift, the final exhibit viewed by visitors to the hall.

The elder Kim’s title of President for Eternity makes him the world’s only dead head of state, and Hong says he continues to receive gifts. As of last year, his presents numbered 221,411.

“No other president could draw so many presents, so our people live in pride,” she says. “Except for this place, where can you see such a sight?”

The annex for Kim Jong Il, whose titles include secretary general of the Workers’ Party and chairman of the Military Commission, houses 55,423 additional presents, Hong says. As with his father’s gifts, most of them were never used but were immediately donated to the exhibition.

A Dynasty Sedan

Some highlights in the annex: a 1998 luxury sedan from the founder of South Korea’s Hyundai group — the model named, appropriately enough, Dynasty — and two roomfuls of carved, gilded furniture from South Korea’s Ace Bed Co.

From time to time, groups of uniformed soldiers troop past to see the gifts. A high percentage of them are five feet tall or shorter. In the 1990s, North Korea reduced the minimum height for military service to 148 centimeters (4 foot 9 inches) from 150 centimeters and the minimum weight to 43 kilograms (95 pounds) from 48 kilograms, according to South Korea’s National Intelligence Service.

A 2004 World Food Program nutritional survey found that 37 percent of North Korean children suffered chronic malnutrition. The state “bears central responsibility” for the shrinking of North Koreans, says Marcus Noland of Washington’s Peterson Institute for International Economics, co-author of a new book about the famine.

Freeing Up Foreign Exchange

“As aid began arriving, the North Koreans cut commercial food imports, freeing up foreign exchange,” Noland said in an e-mail exchange.

The saved money was used to purchase surplus military aircraft from Kazakhstan and to build monuments “to the recently departed Great Leader Kim Il Sung and his son,” Noland says. If the regime had maintained the rate of commercial food imports during the 1990s, using aid as a supplement instead of a substitute, he says, “the famine could have been avoided.”

Noland estimates the death toll at 600,000 to 1 million; others have said as many as 4 million people may have died.

Tour guide Hong, 27, places the blame elsewhere. “From 1993 to 2000 our people suffered from countless natural disasters and also from other pressure in the economic field owing to the U.S. aggressors,” she says, referring to sanctions. Even during such hardships, she says, constructing the annex with the best materials was “the greatest desire of our people.”

As she speaks, there is a brief power blackout, a frequent occurrence in the energy-short country. When the lights come back on, Hong continues.

“Our people are very grateful because the Great Leader Kim Jong Il sent all the gifts here for the people to look at freely,” she says. “It was our duty to preserve them and show them to the new generation.”

Daily NK
Han Young Jin
5/9/2007
“If you have a second child, your rations become equivalent to a family of 4”…citizens respond apath 
 
North Korean authorities have been scrutinizing over the decreasing number of birthrates by young couples and as a result have proposed to increase the amount of rations to families having children.

If a couple gives birth to a second child in the district of Hamheung, South Hamkyung, the whole family will receive 6 months worth of distributions, a source informed. If a third child is born, the rations increase all the more.

After giving birth to a child in a hospital, a married woman from Hamheung can obtain a birth certificate, which is then submitted to the local district office, to receive distributions equivalent to a family of 4. These proposals resemble policies implemented by local district offices in South Korea.

Though Hamheung city has made efforts to increase the birthrate with distributions, the people’s response is all but cold, the source said. How many people would really have a second child just to scavenge off a few months worth of distributions.

One of the main reasons that the birthrate is decreasing in North Korea is due to the fact that women are avoiding giving birth, informed the source.

The source said, “Nowadays, North Korean women engage in businesses and are the breadwinners of the family. They are not satisfied with just having children and bringing them up” and added, “Everyone knows that it is hard enough to live and even harder if you have a lot of children.”

North Korea’s birthrate has continued to decline since the late 1990’s. The average birthrate in North Korea in 1993 was 2.1 births per family and in 2002, 2.04. Comparatively, in South Korea the birthrate per family in 1970 was 4.53 and 1.19 in 2003. Within a period of 33 years, the number of childbirths per family had reduced to 3.34 persons.

In an interview with the Jochongryeon last December, Kang Nam Il, head of the North Korea Population Research Center said, “The decrease of birthrates in our country (North Korea) is no different to that of other nations” and remarked, “Women want to have 2 children, though in the cities women have either 1 or 2 children.”

The source said, “There may be slight differences in each district. Nonetheless, most of the larger cities have adopted this proposal” and added, “This policy was implemented as North Korean authorities are finding it difficult to reach the quota for conscription and the number of students enrolling in schools.”

Korea Times
Andrei Lankov
1/22/2007

Old-style Communism had no doubt about the birthrate. Its approach to fertility was simple and straightforward: the higher, the better. There could be no such a thing as too many soldiers or too many workers.

Thus, Communist states went to great lengths to stimulate the birth rate. Of course, material incentives of all kinds were used widely: an additional tax levied on childless people, heavily subsidized kindergartens and creches, long maternity leaves.

Large families enjoyed special access to goods and services, a significant privilege in an economy based on distribution, and plagued by scarcity.

The material incentives were augmented by intense propaganda.

In the USSR from 1944, a mother who raised more than seven children was decorated with a special order and provided with many privileges. The caveat was that it was not enough to just give birth seven times: the decoration could only take place when the youngest of the seven children reached the age of one year.

The same approach was adopted by North Korea in the early stages of its history. Any other policy would be strange: the country suffered huge population losses in 1945-1953, partially due to the war and partially due to the large-scale migration to the South.

The population was believed to be 9.3 million in 1946, but by 1953 it had declined to 8.3 million.

In 1966 the fertility rate in North Korea reached the very high level of 6.5 children per woman. This was higher than the fertility rate in the South where it had already begun to decline, not least due to a government- sponsored campaign.

But then something happened. Around 1970, fertility rates nose-dived in the North, supplying one of the most dramatic reductions in the world’s demographic history. They dropped to 4.5 in 1974 and then to 3.5 in 1976. The crude birth rate, measured in the number of live births per 1000, declined from 35 in 1970 to 18 in 1976, thus halving in merely seven years.

All these figures are quite reliable since demographic statistics are probably the only kind of North Korean statistics decently known to the outside world. We know this through a blunder by the North Korean authorities who, in the early 1990s, invited a group of foreign experts on demographics to the country and provided them with full access to the relevant data. This was done to get their advice on the forthcoming population census.

To make sure that the foreigners would not create any harm, the data was slightly doctored, but the North Korean officials obviously did not realize that demographic data is, by its very nature, remarkably consistent, so an expert can easily reconstruct missing sections. When they understood their mistakes, the authorities tried to prevent the data from being published, but it was too late.

This statistics which became available in the 1990s confirmed what was long suspected: in the early 1970s, North Korea waged a highly intensive and highly successful family planning campaign. The information about this campaign has filtered out through defectors, but few if any experts understood how dramatic and decisive it actually was.

In the early 1970s, abortions were legalized and education about contraceptive procedures became obligatory in all kinds of health centers. Despite increasing difficulties with all kinds of goods, the contraceptive devices were widely manufactured and freely distributed.

The three-child family was proclaimed an ideal, and from 1978 the desirable number of children was further cut to two.

Around the same time, the marriage age was increased dramatically. The legal marriage age remained the same, but the public North Korean laws are not necessarily written to be followed.

The actual life of the country is determined by instructions, of which the instructions by the Great Leader himself are by far most important. And the Great Leader said in 1971, and said in no uncertain terms, that the youth should be sacrificed for the sake of revolution, not for raising families. In his wisdom he said that a good time to marry would be when a woman reached 28 and a man reached 30. Needless to say, a wish of the Great Leader became instantly the law of the land.

But it was never stated that all these measures were aimed at curbing birth rates. This was the major peculiarity of the entire campaign: in spite of its huge scale, it remained essentially secret. Perhaps, the North was unique in being the world’s only state which was in position to wage an invisible campaign of this kind.

The existence of very efficient and non-transparent channels of influence created such a unique opportunity: orders could be transmitted through party bureaucracy to every family without attracting anybody’s attention, while incentives could be distributed and punishment could be inflicted without much noise.

It is not clear what made Pyongyang undertake such a dramatic reversal of its earlier policies. From the officially published documents of the 1970s it seems that Kim Il-sung began to worry whether grain production was growing fast enough. Perhaps, it was decided to curb population growth because the government was not sure whether it would be able to feed more mouths in the future.

Perhaps, the impact of the intense South Korean family planning campaign was also felt in the North. Unlike lesser beings, North Koreans leaders have always been careful readers of the South Korean press, and they often imitated their adversaries in everything from dress fashions to ideological trends.

Finally, the changing mood of the developing world may have played a role. The early 1970s was the period when developing countries came to see population growth as a problem rather than an opportunity.

At any rate, the program was remarkably successful. Nothing like it could happen these days, when Pyongyang is gradually loosing its ability to monitor and direct all activities of its subjects. The days of Stalinism with North Korean characteristics are long gone.

Donga (Hat Tip DPRK Studies)
1/22/2007

It is expected that the government’s aid to North Korea will be affected as the international community has decided to investigate the general situation of aid projects using U.N. funding including the United Nations Development Program (UNDP). So far, the government and private groups supporting North Korea have often used international organizations as a means to give humanitarian aid to the North, as such aid through the World Health Organization (WHO), United Nations Children’s Fund (UNICEF), World Food Programme (WFP) and others are less influenced by the inter-Korean relations.

Last year, the government and private organizations didn’t provide previously planned corn aid to the North in the aftermath of North Korea’s missile and nuclear tests. However, they spent 5.912 billion won in malaria preventive measures and infant and child support.

In 2005, they sent products worth 25.773 billion won in food aid and quarantine measures against malaria. Besides, they provided goods worth 2.254 billion won in aid and preventive measures against malaria with the North in 2004, and offered North Korea goods worth 20.303 billion won in corn, malaria preventive measures, and vaccine and immunizing agents in 2003.

The total sum Korea spent on the North in humanitarian assistance over the last 10 years (from 1995 to 2004) amounts to $119.43 million, 7.99 percent of the total U.N. financial aid of $1.49 billion to North Korea. During the period, apart from world organizations, the government gave the North $1.16 billion in financial support.

A government official said, “The government’s support for North Korea through international groups is its obligation as a responsible member of the international community,” and added, “Assistance for North Korea through world organizations is for humanitarian purposes, and as far as I know, there is no possibility for misappropriating funds since the aid is being carried out based on a principle of providing 100 percent goods.”

However, contrary to the above government’s official statement, the government seems rather perplexed at the suspicion that its aid through world organizations was diverted to be used for the North’s nuclear development program. The government has used world organizations as an indirect route for its aid toward North Korea because it was worried about getting embroiled in accusations that it is being too lenient on North Korea.

Unification Minister Lee Jae-Jeong also said in his inaugural speech that even humanitarian aid should be divided into emergency aid, assistance in loan form and aid for development, and that emergency aid should continue under any circumstances in order to emphasize the continuation of government’s support for North Korea through world organizations.

Minister Lee has so far expressed regret to the WFP over the suspension of food aid to the North and emergency relief aid for North Korea’s catastrophic flood damage. Another government official stated, The “UNDP seems to have nothing to do with humanitarian aid since it is aid for the development of North Korea. Still, it will still affect the government’s humanitarian assistance program for the North in the future.”

Meanwhile, it was revealed that the government is investing in the Tumen River Area Development Programme (TRADP) the government has been participating in since 1995 under the auspices of the UNDP. An official at the Ministry of Finance and Economy noted, “This year, the government will pay $181,000 for the operating expenses of the TRADP office.”

The Daily NK compared pupoluation statistics from the Population Resource Bureau.

Here are the statistics on North Korea.

Here are the statistics on South Korea.

Here is the story:

North Korea’s infant mortality reaches 21 for every 1000 due to the country’s poor medical system.

A non-profit demographic institute Population Research Bureau (PRB) reported on Thursday that, as of mid-2006, North Korea’s population is approximately 23.1 million and it is expected to increase to 25.8 million in 2025 and 26.4 million, an increase of 14% from now, in 2050.

North Korea’s birth rate is 16 per 1000 people and death rate is 7 for every thousand, and the natural population increase is 0.9%.

North Korea’s infant mortality (21 for every 1000), which is far higher than that of South Korea (5 for every 1000), implies the North’s weak health care system. The average life expectancy is 71 years, 68 for men and 73 for women. Urban population rate is 60 percent.

According to the report, this year’s world population is 6.55 billion and expected to reach 7.94 billion in 2025 and 9.24 billion, 41 percent more than now, in 2050.

Meanwhile, the primary reason for North Korean infants’ death is respiratory infection and diarrhea. And a third of total North Korean infants are suffering serious malnutrition.

From the Daily NK:

NK Whooping Cough…Infant Deaths Helpless

It has recently been confirmed that some children have died of ‘whooping cough’, an acute respiratory epidemic, in Hamhung and Chongjin. In Chongjin, children under 12 are restricted from taking long-trips.

Among North Koreans who have visited areas surrounding Yanbian, rumor has it that “Since this spring, the number of coughing children has increased”, yet this was the first time that a death from a respiratory epidemic was confirmed.

“In Hamhung, some infants have died”

On the 12th, Park Chul Man (pseudonym, 62, Hamhung) who came into China via Tumen said that, “Since mid-April, wooping cough has increased among preschool children, and since June, some infants have died. In Hamhung and Chongjin, all children from infancy to elementary school-age are restricted from going on long trips”.

Kang Sun Mi (pseudonym, 59, Sariwon), from Yanji said that, “Across areas of Hwanghae province, many children suffer from whooping cough”. Kim added that, “children with the illness are confined to preschools, or elementary schools, and their parents bring medicine and food to them daily”.

Whooping cough is an acute respiratory disease to which infants below 5 years old are particularly vulnerable. Throughout the world, 40,000 people die from it annually. After an incubation period of 1 to 3 weeks, children develop a high fever, a runny nose, and continue to cough and tear”.

According to a WTO report, amongst poor countries. wooping cough accounts for 15% of total annual deaths, with the highest death rate recorded in children under 6 years old. The side effects from high fever are usually brain damage and liver failure.

According to Kang, the parents of the sick children take care of all the children confinded to preschools, or elementary schools.

Kang said that, “Because there is no medicine or doctors, it was decided that the should parents do all the nursing work”.

Except for in Pyongyang, the preventive inoculation system is totally destroyed

According to witnesses, since 2002, the preventive inoculation system has been completely destroyed, except for some operation in Pyongyang.

Kim, a defector doctor living in Longjing, explaiend that, “Til 2001, some medicine sent from the U.N. and other sources abroad had been available in Hwamkyung province. However, recently all the medicine goes into Jangmadang to be sold. It is impossible for poor parents to get their children inoculated”.

Kim added that, “the fact that Children over 10 years old have come down with whopping cough shows that the preventive inoculation system in the North is completely dysfunctional”.

According to the UNFPA, the 2004 infant death rate in North Korea is 58 out of 1,000 infants, which is ten times as high as that of South Korea (5.3 out of 1,000 infants).

In 2000, UNICEF reported that, “92.4% of North Korean children under 5 years old were inoculated with DPT to prevent whooping cough, tetanus and diphtheria”.

From the Times of London:
3/9/2006
Michael Sheridan

ALL baby triplets in North Korea are being removed from their parents and placed in bleak state orphanages where they are fed by foreign aid.

The policy has prompted concern among diplomats and aid officials, who have witnessed sets of babies kept in special “triplet rooms” in orphanages across the country.

“There is no doubt that the policy is compulsory and universal,” said a seasoned diplomatic visitor to North Korea who has seen the rooms. He said he had not noticed family members visiting the children in his many calls at the orphanages. Conditions when foreigners are allowed to enter appear to be spartan but clean, according to several witnesses.

Food supplies to orphanages are a priority for both the United Nations relief agencies and the North Korean authorities. Local officials have assured inquirers that the babies are being given privileges to relieve their parents of the anxiety of feeding three mouths while the impoverished Stalinist nation endures an eighth year of food shortages.

But diplomatic experts who understand the Korean language and culture cast doubt on the official explanation.

They believe the true reason is linked to some of the most bizarre aspects of Kim Jong-il’s dictatorship. The number three is auspicious in Korean mysticism and triplets are revered for exceptional good fortune. Some believe they may be destined for power and great achievements, which would account for the regime’s desire to keep them under observation.

Diplomats and international aid officials also doubt that poverty is the explanation, because not even triplets born to high-ranking party members are exempt. “It may be officially atheistic and Stalinist but essentially North Korea operates a state religion infused with superstition, astrology and a personality cult which glorifies Kim as a unique individual,” said the veteran diplomat. “You don’t take any chances with rivals in that system.”

Power conferred by blood descent is also important in Korea’s Confucian tradition. The North Korean capital, Pyongyang, was rebuilt by its communist rulers along principles of Chinese geomancy, with “power lines” linking the purported birthplace of the previous dictator, Kim Il-sung, with the purported tomb of Tangun, founder of the Korean race. As heir to the world’s only communist dynasty, the younger Kim exploits every such tradition to exalt himself, while keeping a careful watch on his clan network of intermarried army and party men.

Children of the elite are usually taken from their parents by the age of two and placed in party-controlled schools to break family bonds and to consecrate their devotion to Kim. Foreign observers believe the triplets are kept together and transferred to these schools when old enough.

The segregation of triplets has provoked debate among UN aid agencies and non-governmental organisations delivering help to North Korea.

Although there appear to be no reasons to fear for the physical safety of the triplets, regular visitors to North Korean orphanages report desperate scenes of isolation and sadness.

On a recent visit a member of a foreign delegation entered a room to see infants placed several to a cot, all rocking backwards and forwards.

“Our people were stunned into silence,” the delegate said. A paediatrician outside North Korea who assessed evidence collected on the visit diagnosed severe emotional trauma.

Witnesses said they had noticed better nursing attention and care for triplets in the special rooms. “But none of those infants knows what affection is,” said one visitor. “Our staff try to cuddle them for a few minutes but then, of course, we have to leave.”

Up to 300 sets of triplets a year are believed to be born in North Korea. In an official statement to the UN Human Rights Commission in Geneva, North Korea said: “Triplets are supplied by the state free of charge with clothing, bedding, a one-year supply of dairy products and a pre-school subsidy, and special medical workers take charge of such mothers and children and care for their health.”

The UN’s World Food Programme has reported a sharp improvement in children’s health in North Korea thanks to foreign aid. Since 1998 cases of acute malnutrition in children under seven have fallen from 16% to 9%, and the number of underweight children has decreased from 61% to 21%.

As tension mounts between North Korea and the United States over Pyongyang’s nuclear programme, however, aid officials fear that any military clash could put at risk their ability to feed the children.

There is little doubt of the regime’s cold-hearted approach to paediatrics. In 1998, Médecins sans Frontières pulled out of North Korea, alleging that aid agencies were denied access to so-called 9-27 camps in which sick and disabled children had been dumped under a decree issued by Kim to “normalise” the country.

UN agencies are still arguing for access to closed districts in the northeast of the country, where prison camps and military facilities are located.

The GAVI Alliance (formerly known as the Global Alliance for Vaccines and Immunisation) is a public-private partnership focused on increasing children’s access to vaccines in poor countries. Partners include the GAVI Fund, national governments, UNICEF, WHO, The World Bank, the Bill & Melinda Gates Foundation, the vaccine industry, public health institutions and nongovernmental organizations (NGOs). The GAVI Fund provides resources for the Alliance programs. The Alliance provides a forum for partners to agree upon mutual goals, share strategies, and coordinate efforts.

In 2004, The GAVI Alliance commissioned a data quality audit of the North Korean immunisation system to facilitate future collaboration.  The audit was designed to assist countries receiving support to improve their information systems, and aid with accuracy in reporting.

The report is saved to this website here:DQA_2004_KoreaDPR.pdf
On the web, it is located here.

The results of the audit are not surprising given the centrally-planned nature of the North Korean health bureaucracies combined with their penchant for secrecy.  I recommend reading the full report to get an idea of how efficient of how socialist institutions are with data, but here are some points I considered interesting:

-District immunization information is not passed on to the national level, but combined at the county level.

-Out of 206 counties, 168 were audited.  The rest were excluded for “security reasons”.

-The Ministry of population and Health contains a National Hygeing Control Committee, which controls the National Hygeine and Anti-Epidemic Institute which is responsible for the Expanded Programme on Immunization.  This program was supported by UNICEF and the WHO.

-Officially, immunizations are offered in all 206 counties to children under one year old.  Records are suposed to be made on an individual’s Child Health Card, and in the doctor’s own ledgers.  These health cards are stored at local health facilities and are supposed to move with the child.  Immunizations are distributed by the national government and are carried out one day per month.

-Outside of the national level, where one computer was used to for entering data, no computers were seen (all done by hand).

-In cases of county data, many errors were detected in the addition of monthly subtotals which could not be explained by the district staff.  The auditors concluded that the district used the 2003 figures rather than admit to missing 2002 data to meet the criteria of the audit.

-County managers do not take the previous year’s achievements into account in order to set realistic targets for the next year.

-Supervision of immunization activities was weak.  Only two counties could provide a written schedule of supervision.

-One health unit destroyed its records.

The Economist
3/11/2004

So far as a visitor can tell in this secretive land, North Korea’s economic reforms are starting to bite. But real progress will require better relations with the outside

COMMUNIST North Korea has started to experiment with economic reform, and opened its door a crack to the outside world. Though its culture of secrecy and suspicion stubbornly persists, it was deemed acceptable for your correspondent to visit Pyongyang’s Tongil market last week. Here, stalls are bursting with plump vegetables and groaning with stacks of fresh meat. You can even buy imported pineapples and bananas from enthusiastic private traders.

But how about a photograph? Most foreigners think of North Korea as a famished nation, and the authorities are evidently keen these days to tell the world about the great strides their economy has made since reforms were introduced in July 2002. Logic might seem to suggest that a snap showing the palpable result of the reforms would be acceptable too. But it is not. The officials were friendly but firm: no pictures of fat carrots.

The July 2002 reforms were ground-breaking for North Korea: the first real step away from central planning since the dawn of communism there in 1945. The government announced that subsidies to state-owned enterprises were to be withdrawn, workers would be paid according to how much they produced, farmers’ markets, hitherto tolerated, would become legal and state enterprises would be allowed to sell manufactured products in markets. Most of these enterprises, unless they produced “strategic items”, were to get real autonomy from state control.

Almost two years on, how to assess the success or failure of these reforms? That climate of secrecy makes it deeply frustrating. Even the simplest of statistics is unavailable. Li Gi Song, a senior economist at Pyongyang’s Academy of Sciences, says he does not know the rate of inflation. Or maybe he is not telling. After all, he says, “We can’t publish all the figures because we don’t want to appear bare before the United States. If we are bare then they will attack us, like Afghanistan or Iraq.” So what follows can be little more than a series of impressions.

The indications are that the reforms are having a big impact. For a start, North Korea has recently acquired its first advertisement (pictured above)—for foreign cars, assembled locally by a South Korean majority-owned company. Or, to be more basic, take the price of rice, North Korea’s staple. Before the reforms, the state bought rice from state farms and co-operatives at 82 chon per kilo (100 chon make one won, worth less than a cent at the official exchange rate). It then resold it to the public through the country’s rationing system at eight chon. Now, explains Mr Li, the state buys at 42 won and resells at 46 won.

North Korea’s rationing system is called the Public Distribution System (PDS). Every month people are entitled to buy a certain amount of rice or other available staples at the protected price. Thus most North Koreans get 300g (9oz) of rice a day, at 46 won a kilo. According to the UN’s World Food Programme (WFP), that is not nearly enough. Anything extra has to be bought in the market.

In theory, even in the market the price of staples is limited. Last week, the maximum permitted rice price was marked on a board at the entrance to Tongil as 240 won per kilo. In fact, it was selling for 250. WFP officials say that in January it was selling for 145 won, which points to significant inflation, for rice at least. This is not necessarily a bad thing, since it means that the price is coming into line with the market.

The won’s international value is also adjusting. Since December 2002, the euro has been North Korea’s official currency for all foreign transactions. In North Korean banks, one euro buys 171 won. In fact, this rate is purely nominal. A semi-official rate now exists and the price of imports in shops is calculated using this.

Last October, according to foreign diplomats, a euro bought 1,030 won at the semi-official rate. Last week it was 1,400. A black market also exists, in which the euro is reported to be fetching 1,600 won—which implies that the won is approaching its market level. It also means, however, that imported goods have seen a big price-hike. For domestically-produced goods, like rice, prices may well go on rising for a good while longer.

What about earnings? Before the 2002 reforms, most salaries lay in the range of 150-200 won per month. Rent and utilities, though, were virtually free, as were (and are) education and health care. Food, via the PDS, was virtually given away. Now, pay is supposed to be linked to output, though becoming more productive is not easy for desk-bound civil servants or workers in factories that have no power, raw materials or markets.

Rents and utilities have gone up, though not by crippling amounts. A two-bedroom flat in Pyongyang including electricity, water and heat costs just 150 won a month—that is, about a tenth of a euro.

Earnings have gone up much more: a waitress in a Pyongyang restaurant earns about 2,200 won a month. A mid-ranking government official earns 2,700. A worker at a state farm earns in the region of 1,700, a kindergarten teacher the same, and a pensioner gets between 700 and 1,500. A seamstress in a successful factory with export contracts can earn as much as 5,000 won a month. Since that seamstress’s pay equates to barely three euros a month, wages still have a long way to adjust.

The prices of food and other necessities, to say nothing of luxuries, has gone up much more than rent has. According to the WFP, some 70% of the households it has interviewed are dependent on their 300 gram PDS ration, and the WFP itself is targeting 6.5m vulnerable people out of a total population of some 23m. Not all suffer equally: civil servants in Pyongyang get double food rations from the PDS.

There are some encouraging stories. In Pukchang, a small industrial town 70km (40 miles) north-east of Pyongyang, Concern, an Irish aid group, has been replacing ancient, leaking and broken-down water pipes and pumps, and modernising the purification system. This has pushed the amount of clean water available per person per day from 80 to 300 litres. Kim Chae Sun is a manager at the filtration plant, which is now more efficient. Before July 2002 she earned 80 won a month. Afterwards she earned 3,000 won. Now she earns 3,500.

As Mrs Kim speaks, three giant chimneys belch smoke from the power station that dominates the town. All workers have been told they can earn more if they work harder, but certain groups have been told they will get even more money than everyone else. In energy-starved North Korea these include miners and power workers. Mrs Kim says her husband, who works in the power plant, earns an average of 12,000 won a month. Her rent has gone up from eight to 102 won a month, and in a year, she thinks, she will be able to buy a television or a fridge.

A lot of people, in fact, are buying televisions. The women who sell the sets from crowded Tongil market-stalls get them from trading companies which they pay after making a sale. The company price for an average set is 72,000 won, the profit just 1,000 won. After they have paid for their pitch, the traders can expect an income of 10,000-12,000 won a month.

Mystery sales
Which makes for a puzzle. Who can afford a good month’s salary for a locally made jacket in Tongil, costing 4,500 won? How come so many people are buying televisions, which cost more than two years of a civil-servant’s pay? How come the number of cars on the streets of the capital has shot up in the past year? Pyongyang still has vastly less traffic than any other capital city on earth, but there are far more cars around than a year ago. Restaurants, of which there are many, serve good food—but a meal costs the equivalent of at least a white-collar worker’s monthly salary. Many of these restaurants are packed.

Foreign money is part of it. Diplomats and aid workers say many new enterprises seem to have opened over the last year. Nominally they are state-owned, but sometimes they have a foreign partner, often an ethnic Korean from Japan. The majority are in the import-export business. Some have invested in restaurants and hotels and some in light industry. Thanks to the 2002 reforms, these firms have a degree of autonomy they could not have dreamed of before. An unknown number of people also receive money from family abroad, but there are still no North Korean-owned private companies.

Farmers are among the other winners: they can sell any surpluses on the open market. But two out of three North Koreans live in towns and cities, and only 18% of the country is suitable for agriculture. The losers include civil servants, especially those outside Pyongyang who do not get double food rations and have no way to increase their productivity.

Factory workers have it the hardest. A large proportion of industry is obsolete. Though Pyongyang has electricity most of the day, much of the rest of the country does not. Despite wild talk of a high-tech revolution, the country is not connected to the internet, though some high-ups do have access to e-mail service. In the east of the country lies a vast rustbelt of collapsing manufacturing plants.

Huge but unknown numbers of workers have been moved into farming, even though every scrap of available land is already being cultivated. The extra workers are needed because there is virtually no power for threshing and harvesting and no diesel for farm vehicles. This requires more work to be done by hand. Ox-carts are a common sight.

The innocent suffer
Markets are everywhere. But this does not mean that there is enough food everywhere. In Pyongyang, where there are better-off people to pay for it, there is an ever-increasing supply. Outside the capital, shortages are widespread.

No one knows how many died during the famine years of 1995-99; estimates range from 200,000 to 3m. In Pukchang, officials say that 5% of children are still weak and malnourished. In Hoichang, east of Pyongyang, schools and institutions tell the WFP that about 10% of children are malnourished. Masood Hyder, the senior UN official in North Korea, says that vulnerable households now spend up to 80% of their income on food.

And yet some things are improving. Two surveys carried out in 1998 and 2002 by the North Korean government together with the WFP and Unicef showed a dramatic improvement in children’s health between those years. The proportion of children who fail to reach their proper height because of malnutrition fell from 62% to 39%, and the figures are thought to be still better now. However, Unicef says that though children may no longer die of hunger, they are still dying from diarrhoea and respiratory diseases—which are often a side-effect of malnutrition.

To a westerner’s eye, a class of 11-year-olds in Hoichang is a shocking sight. At first, your correspondent thought they were seven; the worst-affected look to be only five. Ri Gwan Sun, their teacher, says that apart from being stunted some of them still suffer from the long-term effects of malnutrition. They struggle to keep up in sports and are prone to flu and pneumonia. They are also slower learners.

Pierrette Vu Thi of Unicef says that North Korea’s poor international image makes it hard for her agency, the WFP and others to raise all the money they need. The country is in a chronic state of emergency, she says, and to get it back on its feet it would need a reconstruction effort on the scale of Afghanistan and Iraq.

Such bleak talk is echoed by Eigil Sorensen of the World Health Organisation. He says that health services are extremely limited outside the capital. Medicines and equipment are in short supply, large numbers of hospitals no longer have running water or heating and the country has no capacity to handle a major health crisis.

None of this is likely to change very fast. With no end yet to the nuclear stand-off between North Korea and the United States, American and Japanese sanctions will remain in place. And nukes are only part of it. Last week the American State Department said it was likely that North Korea produced and sold heroin and other narcotics abroad as a matter of state policy. North Koreans who have fled claim that up to 200,000 compatriots are in labour camps. North Korea denies it all.

Reform, such as it is, has plainly made life easier for many. But rescuing the North would take large amounts of foreign money, as well as measures more far-reaching than have yet been attempted. At present, there is no way for the government to get what it needs from international financial institutions like the World Bank. Such aid as comes will be strictly humanitarian, and investment in so opaque a country will never be more than tentative. Domestic reform on its own cannot fix an economy wrecked by decades of mismanagement and the collapse of communism almost everywhere else.