North Korean Economy Watch

Korea Business Consultants has published their October 2009 newsletter.  You can read it here.

Here is the newsletter table of contents:

COVER
- China eyes DPRK’s mineral wealth
- SinoMining acquires 51% of DPRK’s Hyesan Copper Mine
- Transformation and Modernization of North Korea
- DPRK sees peace pact with US as key to disarmament
- US “willing to engage DPRK directly”
- “DPRK Energy Sector Assistance to - Accompany Progress in… Discussions”
- Billy Graham’s son visits DPRK to deliver aid
- Lang visits Seoul

ECONOMY
- DPRK vows to expand trade
- China poised to give substantial aid
- DPRK films looking for joint producers

INTER KOREAN
- Buddhists from south, north call for reopening of Mount Kumgang tour
- Kaesong factory recognized for quality
- Frayed relations hindering development of mineral resources
- ROK aid to north falls
- Lawmakers call for use of rice surplus as DPRK aid
- Farmers demand rice price stabilization

POLITICAL
- Kenya establishes diplomatic relations with DPRK

CULTURE & SPORTS
- Eriksson to coach DPRK?
- DPRK’s Hong battles for gold at World Gymnastic Championships
- DPRK begins preparations for World Cup

KOREA COMPASS
- Mangyongdae
- Korean Proverb

According to Yonhap:

The North’s corn crop for this year is estimated to be less than 1.5 million tons, considerably down from the 2.5 million to 3 million tons it usually garners, said Kim Soon-kwon, a leading corn biologist and head of the International Corn Foundation. The forecast yield portends a severe food shortage in the country where corn is believed to make up 40 percent of the total food supply.

“Of all the corn harvests I’ve seen while visiting North Korea over the past 12 years, this year’s crop was the worst,” Kim said over the telephone from China where he was staying after last week’s trip to the North.

During the Sept. 12-16 trip, he surveyed corn farms on the outskirts of Pyongyang and around Mount Myohyang and found a widespread shortage of fertilizer had slowed corn growth. Also, a drought in July — a critical period for the crop — followed by heavy downpours further damaged corn fields, he said.

“Corn needs fertilizer more than any other grain,” Kim explained. “The fact that the fertilizer had not been provided appropriately because of the limbo in inter-Korean relations is a major factor in the bad crop.” said Kim, who spent 17 years in Africa helping develop higher-yield corn seeds and spreading farming technologies.

Since 1999, the South Korean government has provided an average 300,000 tons of fertilizer worth 96 billion won (US$77 million) to the North every year to help ease the country’s chronic food shortages. But the aid was suspended after conservative President Lee Myung-bak took office last year, linking inter-Korean aid to progress in North Korea’s denuclearization.

North Korea’s own fertilizer output is estimated at less than 500,000 tons a year, about a third of the 1.5 million tons the country needs for its grain farming, according to Seoul’s Unification Ministry.

Aid activists from World Vision, who visited North Korea last month, said rice paddies were more yellow than green this year due to a fertilizer shortage, which will equate to low yields in the harvest season.

Seoul expects the North will fall more than one million tons short of the 5.48 million tons of food needed to feed its population of 24 million this year.

Read the full story here:
N. Korean corn crop to fall by 40 percent: agronomist
Yonhap
9/22/2009

Below are excerpts from the Financial Times:

Pyongyang has told Washington that United Nations World Food Programme [WFP] staff will be barred from distributing food aid after March. The Stalinist regime has also told US non-governmental organisations to leave this month, and rescinded permission for other humanitarian groups to visit, the Financial Times has learned.

In an agreement last year, the US agreed to provide North Korea with 500,000 tonnes of food. The WFP was responsible for distributing 400,000 tonnes, with a consortium of NGOs led by MercyCorps in charge of the remainder.

…

In recent months, however, after North Korea refused to allow sufficient numbers of Korean speakers to join the WFP team, Washington halted food supplies.

Pyongyang has responded by barring food aid workers from operating in the country. So far, the US has supplied 100,000 tonnes to the WFP, and another 70,000 tonnes to the NGOs, which has not been completely distributed.

A US State Department official said that while the US was satisfied with the number of Korean speakers who were allowed to join the NGOs, it was unhappy that the same situation was not true for the WFP, which is responsible for distributing 80 per cent of the food. In addition to MercyCorps, the other NGOs are World Vision, Global Resource Services, Christian Friends of Korea and Samaritan’s Purse.

The official said the US was also responding to North Korea blocking aid workers from conducting a nutritional survey, which was included in the agreement.

“US aid workers have enjoyed tremendous co-operation in the countryside from North Koreans and we hope the DPRK government in Pyongyang will allow them to continue to feed the hungry,” said a Senate aide involved in North Korean issues. “Food aid should be separated from politics.”

Even before the North Korean threat, WFP had been forced to scale back operations because of the break in US funding. The WFP has only received 4.5 per cent of its $504m budget for North Korean operations. A WFP spokesperson said 4.5m of the 6.2m North Koreans targeted under the programme were not receiving assistance as of December.

“WFP hopes that the US will review the humanitarian situation and that food shipments will resume soon,” the spokesperson added.

North Korea recently informed the US that Eugene Bell, World Care and Kirk Humanitarian – three other US NGOs operating in North Korea – would not be allowed to make visits that were already approved. Pyongyang told the US that the planned visits were being cancelled because of “recent developments”.

Nancy Lindborg, president of MercyCorps, said North Korea sometimes temporarily blocked NGOs from visiting. However, she added that she was “hopeful and confident” that the visits would resume. She said her consortium had a “good working relationship” with its North Korean partners.

Read the full article here:
N Korea-US distrust halts food aid
Financial Times
Demetri Sevastopulo
3/17/2009

Below: State Department Briefing, Mercy Corps Press Release
US State Dept press briefing
Robert Wood, Acting Department Spokesman
March 17, 2009

QUESTION: Do you have anything to say or to confirm about North Korea cutting off or saying it does not want U.S. food aid –
MR. WOOD: Yeah.
QUESTION: — and kicking out U.S. NGOs over an accelerated timeline?
MR. WOOD: Yeah, yeah. North Korea has informed the United States that it does not wish to receive additional U.S. food assistance at this time. And we will work with U.S. NGOs and their North Korean counterparts to ensure that food that’s already been delivered – excuse me, food that’s already in North Korea is distributed to the intended recipients. And one of the things I also want to mention is that we have aimed to implement the U.S.-DPRK food aid program according to the terms agreed to by the United States and the North Korean Government in May 2008.
And I will give you just a breakdown in terms of the amount of food aid that we have provided. The U.S. has delivered 169,000 metric tons of U.S. food to North Korea in 2008 and 2009. The last shipment of U.S. food aid, which was nearly 5,000 metric tons of vegetable oil and soy blend, arrived in North Korea in late January and is being distributed by U.S. NGOs.
QUESTION: (Inaudible) of that?
MR. WOOD: Of which one, the 5,000 metric tons? Yeah, I am sorry. I don’t have any – any value here. We can try and get that to you in the Press Office.
QUESTION: Could you say when you were notified of this and how you were notified?
MR. WOOD: I don’t know, but it was obviously communicated to us by the North Koreans. I don’t know how that was done, whether it was done through the New York channel or some –
QUESTION: (Inaudible)?
MR. WOOD: Yeah, I just – I don’t know.
QUESTION: Last week maybe?
QUESTION: Just a clarification?
MR. WOOD: Yeah.
QUESTION: You said it’s being distributed by U.S. NGOs or UN NGOs?
MR. WOOD: U.S.
QUESTION: U.S.
QUESTION: Of the (inaudible) metric tons, what is it of? Is it grain? Is it – what is it?
MR. WOOD: Well, I’ll have to get the specifics on it, but I refer to our last shipment of U.S. food, which was, you know –
QUESTION: Oil and soy blend.
MR. WOOD: That’s right. I don’t have that breakdown. We can certainly try and get that for you, Sue.
QUESTION: Okay. .
QUESTION: (Inaudible), are you disappointed in this?
MR. WOOD: Of course. Absolutely. I mean, this was a program intended to try to help get food to needy North Koreans, and we’re obviously disappointed in that. This, you know, does not help us implement this agreement that we reached with the North back in 2008, so –
QUESTION: Well, not only does it not help you implement it, it kind of – I mean, are they abrogating the agreement?
MR. WOOD: Well, I don’t have the actual text of the agreement, so I can’t say with absolute specificity that they’re in violation of it. But we have an agreement to try to deliver, you know, this food assistance, and now the North is saying they do not want to receive any more assistance. So you know, we’re concerned about it.
But the food that is there right now in North Korea, we’re going to work with U.S. NGOs, with their North Korean counterparts, to make sure that this assistance gets to the people who –
QUESTION: Can you be a little bit more explicit about why you’re concerned about it, why you’re disappointed?
MR. WOOD: Well, I mean, clearly this is food assistance that the North Korean people need. That’s why we’re concerned. You know, this humanitarian assistance that we provide to the North has nothing to do with the Six-Party Talks. This is about our true humanitarian concern for these people. And as you know, the food situation in North Korea is not a good one, and so we’re very concerned about it.
QUESTION: Did they give you any explanation why they won’t – they didn’t want any more?
MR. WOOD: They have just said that they do not want to receive any additional food assistance at this time. That’s about as far as they went.
QUESTION: But no reason was provided at all? Just a one-sentence note you got?
MR. WOOD: I mean, it’s – I don’t know if it was one sentence that was given to us, but you know, that was the bottom line. And that’s the most important part of this.
QUESTION: And when did they inform you?
MR. WOOD: It was, I think, over the last couple of days, I believe.
QUESTION: Robert, do you know what the accelerated timeline for the withdrawal of the NGOs will be?
MR. WOOD: I don’t know.
QUESTION: It was supposed to be the end of May.
MR. WOOD: Yeah, I don’t know. Again, probably the best folks to address that are the North Koreans.

Press Release by relief organizations:
FOR IMMEDIATE RELEASE

March 19, 2008                                                                     

STATEMENT OF NGO PARTNERS ON CESSATION OF FOOD AID PROGRAM IN THE DEMOCRATIC PEOPLE’S REPUBLIC OF KOREA (DPRK)

Contacts:  Joy Portella, +1.206.437.7885, jportella@sea.mercycorps.org

March 19, 2009—The following is a statement issued by the NGO Partners that have been distributing food aid in the DPRK through a program supported by the U.S. Agency fro International Development (USAID). The NGO Partnership is led by Mercy Corps, co-led by World Vision, and includes Christian Friends of Korea, Global Resource Services and Samaritan’s Purse:

This week, North Korean authorities have asked us to close the USAID-supported food assistance program that we have been operating since June 2008. Our joint team, dedicated to this program, will leave the DPRK by the end of March.
 
We are saddened by this decision, but are very proud of what the program has accomplished.  Working closely with our North Korean partner, we have ensured that food reached almost one million vulnerable children, pregnant and nursing mothers and the elderly.
 
Each of our organizations has worked in the DPRK for more than a decade. We remain committed to assistance in that country, and our individual, on-going programs focused on health, water, sanitation and agriculture will continue as before.
 
The NGO Food Assistance program is part of a larger 500,000 metric ton initiative supported by USAID in which the World Food Program was to distribute 400,000 metric tons of food and the NGO Partners were to distribute 100,000 metric tons.  In the ten months of this program, 169,000 metric tons of food has been delivered to the DPRK, of which the U.S. NGOs have brought in 71,000 metric tons of food.  This food from NGOs has benefitted more than 900,000 people in the two north west provinces of Chagang and North Pyongan.
 
This has been a model program with unparalleled monitoring cooperation to ensure that food gets to those most in need. Our in-country staff of 16 people has worked closely with our North Korean partners.
 
The NGO food assistance program was scheduled to run until the end of May 2009. Until the end of the month, we will work with our North Korean partners to ensure a proper close-out.
 
We remain committed to helping the people of the DPRK to overcome hunger and improve their lives. The food program resulted from the tremendous humanitarian need in the DPRK. We will continue to work—as individual agencies and in cooperative partnerships—to address these needs. We hope the success of this program will serve as a model for the future.

NCNK Newsletter Vol. 2, Issue 1
January 13, 2009
Download PDF here

A DPRK “Shangri-la” Powered by Solar Electricity
By Victor Hsu

In 1988 Bongsu Church — the first Protestant Church built in Pyongyang since the end of the Korean War — opened its doors for the first time. The following year the Korean Christians Federation asked if my organization, Church World Service, would provide a generator for the brand new church. A generator would enable parishioners to enjoy air conditioning during the hot summer months when the temperature can reach 85 degrees Fahrenheit and above. I suggested to the church officials that we install solar generators from China. However, lacking experience with solar power, they preferred the more familiar diesel-powered generators. But the seeds of interest in alternative sources of energy were just starting to grow. Soon after this exchange I learned that the DPRK was investigating the possibility of using another form of renewable energy — windmills.

I have been visiting the DPRK for two decades in many different capacities, most recently as the DPRK National Director of World Vision International (WVI). Over this time, I have learned, as have many of my colleagues from the United States and around the world, that knowledge-sharing and knowledge transfer enhance the benefits of humanitarian assistance. There is increasing evidence that the DPRK seeks out and appreciates this form of international cooperation.

Since 2000, various technical cooperation and assistance projects have involved NGOs and professional organizations in Europe and North America, especially in the field of agriculture and medicine.

World Vision International (WVI) has been active in DPRK since 1995, when a serious humanitarian crisis hit the country. In 2006, shortly after becoming DPRK National Director at WVI, I suggested to the DPR-Korean American Private Exchange Society (KAPES) that they designate a province where WVI could concentrate its humanitarian interventions. Subsequently, after discussions with the DPRK Mission to the UN, North Hwanghae Province was designated as a World Vision International humanitarian zone, and we were asked to work in Dochi-ri. An ambassador at the DPRK Mission to the UN, Ambassador Han Song Ryol, told me he could envision the province becoming a DPRK Shangri-la!

Dochi-ri is a small sprawling farming community nestled in hilly terrain in Yongtan County, just about a two hours drive south of Pyongyang. A river runs through this community of 12,000 residents and the farmers enjoy a man-made reservoir. This village traditionally grows corn but has begun soybean cultivation as part of the DPRK agricultural program to replace corn with the more nutritious soybean. Like many “ris,” or villages, in the DPRK, Dochi-ri is served by a clinic and a nurse. Itinerant doctors visit the village for non-routine medical interventions. The clinic, the houses, the small primary school and the kindergarten rely on a sporadic electricity supply.

WVI agreed to provide Dochi-ri with an organic fertilizer plant, the first of its kind in the DPRK, a potable water and sanitation system, a bakery and a soymilk processing facility. We also agreed to upgrade the clinic, replace the roofs of the clinic, kindergarten and primary school, and replace the school furniture. All these projects have been completed over the last 2 years, with the exception of the potable water system, which will be finished by mid-2009. The 12, 000 Dochi-ri residents are happy with all of the various renovations, but they are most excited by one innovation: the experiment with solar generators. After careful research and planning among the DPRK partners at the national and local level with the help of a Chinese company, WVI agreed to provide solar generators to the school (5kWh), the clinic (3kWh) and the home of the village engineer (2kWh). These were purchased in China and installed by Chinese technicians.

Chinese technicians and American engineers – the latter coincidentally in Dochi-ri to drill wells and install the water and sanitation system – trained the local people’s committee managers on the use and maintenance of the generators. Our engineers have visited Dochir-ri several times over the past two years after the generators were installed and were happy to respond to all of the villagers’ technical questions. WVI engineers complimented our North Korean partners on the quality of the maintenance. Whenever the solar generator issue comes up in the conversations, our technicians assure the managers that good maintenance of the batteries will ensure at least the minimum of their five-year life span. Our engineers have no doubt that this will be the case given the track record of the DPRK’s technicians. DPRK technicians are known for the meticulousness and thoroughness of their approach to learning.

The village technician’s home with its constant supply of electricity is now the constant envy of the “ri.” In fact, the villagers are requesting WVI to supply each of their homes similar generator. When I visited Dochi-ri in September 2007 the engineer invited the WVI delegation to his home to show us how he is able to have lighting in his house and enjoy TV and music from his CD player. Though he could not speak a word of English, his smiles and a halting “Thank you!” were enough for us to know how the solar panels are making a real difference in the life of this farming community.

A year after the first generators were installed, Dochi-ri villagers determined that they needed a generator to power the water tower for the school. The decision to “go solar” was easy, based on the positive experiences with the first three generators. A fourth solar generator was installed in 2007, and it now provides water for the school. In the past two years, the cost of solar panels has soared, and China is investing heavily in anufacturing them. We hope to see a similar effort to design more powerful, maintenance-free and efficient batteries to enable us to continue to bring solar power to Dochi-ri and other villages in the DPRK.

The experience of the community has been overwhelmingly positive especially with regard to this low-maintenance but highly efficient technology. Now Dochi-ri has ready access to organic fertilizer for its crops, a water sanitation system, an upgraded school, kindergarten and clinic, and bread and soymilk for the children’s lunches. With electricity in the school and clinic, Dochi-ri is beginning to become the Ambassador’s vision of a DPRK Shangri-la!

UPDATE: Below is a list of organizations that are distributing US aid in the DPRK:

Mercy Corps works amid disasters, conflicts, chronic poverty and instability to unleash the potential of people who can win against nearly impossible odds. Since 1979, Mercy Corps has provided more than $1.5 billion in assistance to people in 106 nations.

World Vision is a Christian humanitarian organisation dedicated to working with children, families and their communities worldwide to reach their full potential by tackling the causes of poverty and injustice. We serve all people, regardless of religion, race, ethnicity or gender.

Samaritan’s Purse provides immediate, no-red-tape response to the physical and spiritual needs of individuals in crisis situations, especially in locations where few others are working. The organisation is working in more than 100 countries to provide aid to victims of war, disease, natural disaster, poverty, famine and persecution.

Global Resource Services is dedicated to going beyond charity to find real solutions to complex global crisis where peace and security are in jeopardy. Our mission is driven by an end vision of reconciliation. Relationships, respect and reconciliation are the common threads that empower our cause.

Christian Friends of Korea (CFK) has been working since 1995 to bring hope and healing to the people of North Korea. To date, CFK’s efforts to build trust and relationships and meet real human needs at tuberculosis and healthcare facilities have resulted in the delivery of over $35 million USD in humanitarian assistance to the DPRK.

From the World Vision web page:

Five aid agencies today announced that they have signed an agreement with the Democratic People’s Republic of Korea to deliver U.S. government food assistance to North Koreans suffering from severe food shortages. The partnership will distribute 100,000 metric tons of food to more than a half-million needy people over a twelve-month period.

Mercy Corps is leading the programme, with World Vision as co-lead, pending final agreement. Partner agencies are Samaritan’s Purse, Global Resource Services and Christian Friends of Korea. Daily rations will be provided for approximately 550,000 vulnerable people - mostly children, the elderly and pregnant and nursing women - in two North Korean provinces. The programme, funded by the U.S. Agency for International Development’s (USAID) office of Food for Peace, is the first U.S. food assistance programme for North Korea since 2000.  

ORIGINAL POST:
From the Mercy Corps web site (July 1, 2008):

Mercy Corps is taking the lead in a yearlong distribution of 100,000 metric tons of food to quell rampant hunger in North Korea.

We have been asked by the U.S. government to spearhead a partnership of five non-governmental organizations (NGOs) that will implement a major food assistance program for North Korean families. Distribution of the food aid - provided by the U.S. government and funded by the U.S. Agency for International Development’s (USAID) Food for Peace program - is taking place over the course of twelve months beginning in June 2008. Alongside our partner organizations, we will distribute food such as cereal grains, vegetable oils and beans through schools, hospitals, orphanages and other institutions.

…

Our food distribution programs are expected to reach more than 550,000 people - primarily children, the elderly and the extremely poor - in two provinces. We will have staff residing in North Korea to visit families, monitor distribution and assess impact.

Since 1996, Mercy Corps has promoted cross-cultural exchange and worked with the country’s vulnerable families and communities to help meet health and nutritional needs, as well as collaborate on long-term agricultural and economic solutions. Our late co-founder, Ells Culver, reached out to the North Korean people in the aftermath of drought, flooding and food shortages. That cooperation was strengthened last year when we hand-delivered $13 million of medicines for flood survivors, and earlier this year when we received a USAID grant to install emergency generators and medical equipment in six county hospitals.

Your gift to our Global Food Crisis fund will help us deliver assistance to even more families in some of the world’s most challenging places.

To learn more, visit their website (link).

To make a donation, click here.

To read the press release, see below:
Aid Agencies to Deliver U.S. Food Assistance to North Koreans
Reuters Alert Net
7/2/2008
Contact: Geraldine Ryerson-Cruz, +1.202.572.6302, gryerson@worldvision.org

Daily NK
6/14/2007

At the North and South Korea’s agricultural cooperation-related symposium sponsored by World Vision, in commemoration of the opening of the North Korea Agricultural Research Institute (Chief Park Hyo Geun), the Senior Researcher of Korea Rural Economic Institute Agricultural Researcher Kwon Tae Jin emphasized, “North Korea’s action, while ignoring the reality of aid organizations, of requesting or intervening in aid for development is an action which ignores international norms and processes.”

Researcher Kwon did acknowledge the necessity of change from an emergency aid form to aid for development.

However, he insisted, “If it is doubtful whether or not North Korea, while requesting a conversion to aid for development, is truly prepared to receive development aid, then the propriety of such aid and transparently showing the goal and content in addition to the process and means of monitoring as well as institutional equipping for evaluating the results should take place.”

Researcher Kwon pointed out that support to North Korea has played a positive role in preserving supply and demand of food provisions and the open and reform of North Korea, but the problem of not providing sufficient information to patrons and the failure to promise transparency has been exposed.

Further, regarding support for North Korea, he maintained that our government has caused tension by pursuing aid projects while failing to solidify the chemistry of citizens and choosing means of pursuing projects sporadically according to political reasoning.

On one hand, Researcher Park Hyo Geun pointed out, “The principal issue of North Korean agriculture is that the poor are not able to escape the cycle of poverty. The weakening of productivity of labor is sustaining the cycle of poverty of the destitute.”

Chief Park pressed, “When the February 13 agreement is actualized and the North Korean nuclear issue becomes resolved, domestic support for North Korea will increase epochally. The influence that support for North Korea will have on South Korea’s agricultural industry should greatly be considered.”

Yonhap
7/6/2005

North Korea’s food situation is stabilizing and is not as bad as expected in rural areas, a South Korean agricultural scholar who just returned from Pyongyang said Tuesday.

In an interview with Yonhap News Agency, Kwon Tae-jin, senior scholar of the state-run Korea Rural Economic Institute, said, “The peak of food shortage usually comes in June, but I didn’t feel it probably because North Korea released food rations.”

Kwon visited Pyongyang, Chongju in North Pyongan Province, Hamhung in South Hamgyong Province and Paechon in South Hwanghae Province, along with officials of World Vision, an international relief agency, May 25-31.

In March, North Korean officials indicated that North Korea faced a shortfall of 1 million metric tons of food and asked the World Food Program (WFP) to expand its assistance.

Jean-Pierre DeMargerie, head of the WFP’s office in North Korea, said that the situation is not as bad as it was in the 1990s when about one million North Koreans are estimated to have died of hunger, but the food situation has again “started to deteriorate because of June and August flooding of critical cropland and major reductions in WFP and bilateral food assistance.”

Kwon said North Korea would have little difficulty planting rice seedlings this year as reservoirs are full of water in most plains, and tractors and rice-planting machines can work at full capacity.

“In some areas the food situation might be worsening, but agricultural production has stabilized. They seem to be focusing on diversifying their sources of income by planting some cash crops,” he said.

A weak harvest in 2006, disastrous summer flooding and a 75 percent fall in donor assistance dealt severe blows to the impoverished nation, according to WFP officials.

South Korea resumed shipments of fertilizer and emergency aid to the North, but it plans to withhold rice aid as an inducement for North Korea to fulfill its promise to shut down its main nuclear reactor as part of the landmark February 13 agreement.

South Korea suspended its food and fertilizer aid to North Korea after the North conducted missile tests in July. Resumption of the aid was blocked due to the North’s nuclear bomb test in October.

According to a recent think tank report, North Korea could run short of up to one third of the food it needs this year if South Korea and other countries withhold aid.

Data from the WFP and South Korea’s Unification Ministry show that the North will need between 5.24 million tons and 6.47 million tons of food this year. Depending on the weather, the availability of fertilizer and other factors, the communist state may only be able to produce 4.3 million tons of food by itself, the report said.