North Korean Economy Watch

According to the Daily NK:

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

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

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

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

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

Read the full story here:
Food Distribution Unmoved by April
Daily NK
Hwang Chang Hyun
2012-05-08

Marcus Noland writes for the East-West Centre:

With global attention focused on North Korea’s failed rocket launch today, it’s worth also taking a look at the other claim the Pyongyang regime has long made for the imminent April 15 birth centennial of its founding leader, Kim Il-sung: emergence into economic prosperity.

Originally, the regime had declared that the country would emerge as “a strong and prosperous nation” during this time, but with that aspiration far from attainment, the goal has been relaxed recently to marking the country’s “passage through the gate” to prosperity. In reality, the North Korean economy today is characterized by macroeconomic instability, widening inequality and growing corruption.

No one (including the North Korean government) knows with any true confidence the size or growth rate of the country’s economy, but the consensus among outside observers is that per capita income today is lower than it was 20 years ago, and by some reckonings is only now re-attaining the level it first achieved in the 1970s.

Price data indicate that since a disastrous currency reform in November 2009, inflation, including for basic goods such as rice and coal, has been running at well over 100 percent a year. The black market value of the currency has been falling at a similar rate, meaning that those with access to foreign exchange are insulated from the ravages of inflation while those reliant on the local currency have seen their buying power dwindle. Unlike in the past, when grain prices fell after the harvest – sometimes by quite substantial amounts – prices have continued to rise this year. Analyses by both the U.S. government and international groups indicate that there is not enough food to go around, and some families are going without.

Help was supposed to be on the way in the form of a resumption of U.S. aid, but the unraveling of the “Leap Day” food-for-weapons deal in the wake of North Korea’s announcement of its rocket launch means that conditions for the North’s chronically food-insecure population may not improve.

This picture stands in sharp contrast to numerous anecdotal reports of improved living standards, abundant cell phones, and even traffic jams in Pyongyang, though it is consistent with the less numerous reports of grim conditions in provincial cities. My colleague Stephan Haggard has dubbed this phenomenon “Pyongyang illusion” and believes that it may well go beyond typically observed urban- or capital-bias in governance, and represents an attempt by an insecure regime to forestall any Tahrir Square type activity in the capital city.

Macroeconomic imbalances and shortages have exacerbated the country’s problems with corruption, already assessed by Transparency International as the worst in the world. The situation not only represents a drag on growth, but could impair the regime’s capacity to govern, as the parochial interests of corrupt officials diverge from the policy preferences of Pyongyang. In the wake of the December death of leader Kim Jong-il, the state has responded with heightened control measures, including purging the security units who were supposed to pursue corrupt officials but who had evidently themselves been corrupted. But there are limits to the effectiveness of repression when the underlying problems remain unresolved.

In short, the country is beset with macro instability, deepening inequality, rising corruption, and a political leadership that appears to lack the vision or capacity to respond. Some current policies have allegedly been ascribed to Kim Jong-il’s “dying wish,” and it would not be surprising if the regime uses this rationale for some time. But at some point Kim Jong-un and the new leadership will have to take ownership of policy. That transition could well begin on the centennial of his revered grandfather’s birth.

Read the full article here:
Behind North Korea’s rocket launch, economic turmoil
East-West Centre
Marcus Noland
2012-4-12

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.

(more…)

According to Reliefweb (2012-3-23):

According to the World Food Programme of the United Nations, one in three children is affected permanently by hunger, mal- or undernutrition to a degree so alarming that the children are too small for their age. Also one in four nursing mothers is mal- or undernourished – and we can imagine the consequences for the infants.

In order to help above all those who are weakened by diseases, we offer support in the form of food supplies and together with a local partner of humedica we sent another relief good shipment, this time containing 20 tons of rice, to the DPR of Korea on March 23.

The nutritious staple will be provided to the hospital in Haeju (Hwanghae-namdo province), where ill children, women and men are offered medical treatment during their stay as in-patients. Thanks to the humedica shipment, these patients will regain new strength.

Haeju is a city of 222,396 inhabitants. It is located at the western coast of the country, 140 kilometres south of the capital of Pyongyang. Located at a distance of seven kilometres and half from the town is Mount Suyang, which is above all famous for of its cataracts. The water of Mount Suyang falls down over cliffs of a height of 128 metres and a breadth of twelve metres into the depths of a picturesque little lake.

On the mountainside itself, there is an old fortification built in the Goryeo Dynasty that can be visited by tourists. Sights in Haeju are an old stone cooling house (also built in the Goryeo Dynasty) and a pagoda of five floors. Haeju is an important traffic junction; above all companies in the cement and chemical industry have set up their businesses there (Source of information: Wikipedia).

Since 1998, humedica has been sending relief shipments with a value of more than one million euros to the DPR of Korea. Besides food, seeds or special additional food these shipments also contain drugs, sanitary articles, medical equipment and every-day necessities.

Please support us with your personal contribution so that we will be able to help the people in this country also in future.

humedica e. V.
Donation reference “Famine relief North Korea”
Account 47 47
Bank Code 734 500 00
Sparkasse Kaufbeuren
SWIFT/BIC-CODE: BYLADEM1KFB
IBAN: DE35734500000000004747

According to Yonhap:

South Korea has helped vaccinate nearly 4 million North Korean children against hepatitis B over the past two years despite tensions on the Korean Peninsula, a German relief agency official has said.

South Korea has provided vaccines worth US$2.37 million to North Korea from 2010 to February 2012 through Caritas Germany as part of its medical aid to the impoverished country, said Wolfgang Gerstner, a consultant of Caritas Germany.

Here is a little information on Hepatitis B:

Hepatitis B is irritation and swelling (inflammation) of the liver due to infection with the hepatitis B virus (HBV).

Hepatitis B infection can be spread through having contact with the blood, semen, vaginal fluids, and other body fluids of someone who already has a hepatitis B infection.

Infection can be spread through:

1. Blood transfusions (not common in the United States)

2. Direct contact with blood in health care settings

3. Sexual contact with an infected person

4. Tattoo or acupuncture with unclean needles or instruments

5. Shared needles during drug use

6. Shared personal items (such as toothbrushes, razors, and nail clippers) with an infected person

7. The hepatitis B virus can be passed to an infant during childbirth if the mother is infected.

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

According to the Baptist Standard:

A Korean Texas Baptist with a 17-year track record of relief ministry in North Korea made two trips there in recent months to deliver 50 tons of flour and 1,100 pairs of warm socks and other supplies for orphans.

Yoo Jong Yoon’s most-recent trip to North Korea ended just two weeks before the death of the nation’s supreme leader, Kim Jong-il.

Yoon—former Korean mission field consultant with the Cooperative Baptist Fellowship —delivered $28,000 worth of flour and supplies provided by CBF, Texas Baptist Men , the Korean American Sharing Movement of Dallas and several individual donors.

At their recent board of directors meeting and annual convention, TBM agreed to provide another $10,000 in 2012 to meet needs in light of North Korea’s longstanding food shortage. TBM’s ongoing involvement in hunger relief, humanitarian aid and development projects in North Korea dates back to the mid-1990s.

Yoon anticipates delivering 60 tons of corn in May and another 60 tons in September. One ton of corn provides for about 2,200 meals, he explained.

Yoon also secured memoranda of understanding from the government that could open the doors to providing support for an English-language teaching institute and medicine, supplies and equipment for a hospital in Wonsan City in Kwangwon Province.

Read the full quote here:
Baptist food deliveries continue in North Korea
Baptist Standard
20120-2-24

According to Xinhua:

South Korea has approved humanitarian aid to the Democratic People’s Republic of Korea ( DPRK) by civic groups here, the latest in the flow of private aid to the estranged neighbor, local media reported Thursday.

With the approval, two South Korean aid groups, Nanum International and the Eugene Bell Foundation, plan to send medical equipment including X-ray machines and diagnostic reagents for tuberculosis, according to Yonhap News Agency.

South Korea suspended almost all exchanges with the DPRK following their border incidents in 2010, but has occasionally allowed humanitarian assistance to the impoverished neighbor.

Civic groups need government permission for DPRK-bound aid.

The original Yonhap story is here.

Read the full story here:
S. Korea approves medical aid to DPRK by civic groups
Xinhua
2012-2-23

UPDATE 1 (2012-2-24): The Choson Ilbo reports that the UN WFP is not extending its DPRK mission. According to the article:

The World Food Programme plans to end its emergency aid mission to North Korea in March as originally scheduled.

Citing officials from the WFP, Radio Free Asia reported Thursday that its emergency operation for the most vulnerable groups in the North, including children, pregnant women and the elderly, will end next month.

The organization said once the emergency program is over it will switch back to its smaller-scale assistance program, which provides food to roughly 3.5 million women and children in need of immediate nutritional support.

Meanwhile, the report added that the UN-affiliated organization had only raised about 30 percent of the funds needed to support North Koreans as of Wednesday.

ORIGINAL POST (2012-2-22): According to the Korea Herald:

The U.N. World Food Programme is planning to extend its Emergency Aid mission to North Korea beyond the original deadline of March.

The Emergency Operation, which started in April, aimed to address a dangerous and worsening food crisis in North Korea. It focused on the most vulnerable groups, women and children, of which there were 3.5 million in need of immediate support to prevent starvation.

The WFP has been able to work with North Korea in carrying out the operation, under very stringent rules.

Although the WFP has experienced some successes, a difficult 2011 has meant that the mission was unable to fully address the growing crisis, and an extension of the emergency operation is needed.

“We are currently finalizing plans for the operation beyond this point, but it will certainly continue to focus on the provision of nutritional assistance to the most vulnerable women and children,” WFP Asia spokesman Marcus Prior said.

Despite making progress in the latter stages of 2011, the WFP was unable to fulfill the goals of the original mission.

“Because of relatively slow funding at the outset, and the time taken to purchase and ship the food to the DPRK, distributions were at a very low level through the lean season months of May to August,” Prior said. DPRK stands for the Democratic People’s Republic of Korea, North Korea’s official name.

“At one point in the middle of 2011, production of specialized nutritious foods at factories supported by WFP came to an almost complete standstill,” said Prior. WFP documents say that during that time “much of the population of DPRK suffered prolonged food deprivation.”

The WFP says there is a “chronic gap” between the daily nutrients needed and the nutrients North Koreans have access to, with the situation more crucial for women and children.

Recent studies have shown that malnutrition in the first 1,000 days from conception can have permanent consequences for both physiological and intellectual development.

With a recent U.N. estimate that one-third of North Korea’s children under 5 are malnourished, the continuing crisis could have catastrophic implications on their future and not just their immediate food needs.

The WFP also reported through interviews with health officials that there was a 50 to 100 percent increase in the admissions of malnourished children into pediatric wards compared to last year.

The latest WFP DPRK report has called for more international aid that will be needed for the continued efforts, as the food from the original mission begins to reach its limits.

“We continue to have supplies available to see us through the next three to four months, but will require significant new funding to ensure these distributions can continue through the later, most difficult, lean season months of this year.”

Although the WFP does not collect data on the death toll caused by the 2011 food shortage, the latest report did say that another year of the same prolonged food deprivation will have a serious impact on the North Korean population.

My compendium of DPRK food stories in 2011 is here.

Read the full story here:
WFP to extend emergency mission to North Korea
Korea Herald
Hamish Macdonald
2012-2-22

Chico Harlan writes in the Washington Post:

Recent North Korean defectors in South Korea sometimes joke that their transition to capitalist life begins with two key steps. First, they buy a smart phone. Then, they get a lesson about phone banking.

With those two things, defectors can then transfer money back to North Korea, where many still have family or friends. The money doesn’t go directly to the North; rather, it’s channeled through a series of brokers, routed through China, and trimmed by handling fees and commissions.

But as underground systems go, this one is quite functional. Some 50 percent of North Korean defectors have transferred money back home. Those who try once almost always do it again.

Just a decade ago, almost no money flowed back to the North in the form of remittances. But the number of defectors here has skyrocketed, and the amount of cash they send back home has surged as well.

Some 23,000 defectors now live in South Korea, with the number jumping more then 2,500 every year. (Just 12 years ago, a total of 1,400 North Koreans lived in the South.)

The defectors don’t make much money — about $1,000 per month on average — but that doesn’t stop them from sharing it generously, shipping it back to a country where $1,000 can feed a family for a year.

According to a January 2011 survey from the Database Center for North Korean Human Rights, some 56 percent of defectors who send money give more than $900 (1.01 million won) annually. Another 12.5 percent give more than $4,500 (5.01 million won) annually.

North Korea scholar Andrei Lankov, in this April 2011 essay, estimated that the total money given each years totals $10 million–an enormous influx of cash into the extremely impoverished North.

One recent defector, Ju Kyeong-bae, described during a recent interview at his apartment in Seoul how he transfers money to his friends in the North, who live in a village some 25 miles from the Chinese border.

First, one of his friends — let’s call him Mr. Jeong — calls Ju from North Korea, using a Chinese cell phone that gets a signal from towers just beyond the border.

Mr. Jeong provides a telephone number for a broker in China. Ju calls the broker.

The broker then gives Ju the name of a bank in South Korea, along with a particular account number.

Ju determines the amount of money he wants to send, punches a few buttons on his iPhone, and transfers the money, which then pinballs from the South Korean bank to a Chinese bank, using two brokers.

The Chinese bank account belongs to a businessman (let’s call him Mr. Kim) who does frequent work in North Korea — and who holds lots of private wealth stashed away in the North. When Ju’s money lands in Mr. Kim’s account, Kim just lets it sit there. He never withdraws it and takes it across the border. Rather, he distributes money he already has stashed in North Korea to Mr. Jeong, who in turn gets it to the person Ju’s payment is intended for.

Mr. Jeong then places another call to Ju — a confirmation.

“Some of the middle men, I never even know their names,” Ju said. “It’s all based on trust. If you don’t trust the system, you’re better off not even sending money.”

According to the 2011 survey of defectors, the commission on transfers is generally between 21 and 30 percent. It’s almost never higher than 50 percent. Some 90 percent of defectors say they receive a phone call from their friend or family member confirming that they received the payment.

One of every two defectors thinks his or her money transfers will spark admiration toward the South. About one in every 10 thinks the money will raise resistance against North Korean society.

South Korea technically bans the transfers, but an official at Seoul’s Ministry of Unification, which handles North Korea policy, says that the government has little incentive to stop the remittances.

“They fall into a gray area,” said the official, requesting anonymity because he was unauthorized to speak about the policy on record. “We always say no money should be sent to North Korea in case it is diverted for military purposes. But in this case, we’re not talking about huge amounts. And it’s for humanitarian purposes. So long as that’s the case, we won’t pursue it.”

Additional posts on remittances:

1. ROK moves to control inter-Korean remittances (2011-5-26)

2. ROK seeks to gain greater control of sanctioned cash flows to DPRK (2011-05-25)

3. Remittances from North Korean defectors (2011-4-21)

4. Defectors remit US$10m a year to DPRK (2011-2-23)

Read the full story here:
North Korean defectors learn quickly how to send money back home
Washington Post
Chico Harlan
2012-2-15