North Korean Economy Watch

Yonhap
9/24/2007

North Korea is becoming more transparent and effective in dealing with disasters, spurred by both internal and external factors, an Asia-Pacific regional specialist said in his latest paper.

Dr. Alexandre Mansourov, a securities studies professor at the Asia-Pacific Center for Security Studies (APCSS) in Hawaii, noted five trends in the North Korean government’s responses over the past decade to nationwide shocks, including floods, typhoons, drought and avian influenza outbreaks.

Increasing transparency is one of the trends, with Pyongyang more quickly admitting to disasters that have struck the nation, he said in a paper (download here) released last week through the Korea Economic Institute in Washington.

It took North Korea several years to admit the impact of natural disasters in the mid-1990s that led to massive starvation and chronic food shortages. But in August 2000, when it was hit by Typhoon Prapiroon, North Korea released the news three weeks after it occurred, and in the two following years, when other typhoons struck, North Korea reported it within three to six days, Mansourov said.

Pyongyang immediately acknowledged flooding in August 2007, he said.

“Observers agree that the timeliness, details, and amount of coverage of flood damage and rehabilitation work in August 2007 is unprecedented.”

North Korea is also showing institutional knowledge and a capacity for disaster management, with new organizations growing out of a decade of learning and experience, such as various provincial centers, the professor said.

The North Korean Red Cross Society has been exceptional, he said, working with the International Federation of Red Cross and Red Crescent Societies, and has made itself the leading agency in disaster preparedness and response.

Inter-agency coordination has also increased, with deputy prime minister-level working groups working closely together in each disaster since the flood of 2001, as there are preventive programs through which basic relief supplies are stored in town and villages.

For example, the 10-year strategy against avian influenza, worked out by the emergency commission in 2005, would have been unthinkable a decade ago, Mansourov wrote.

Another notable trend is the increasing cooperation between the North Korean government and international humanitarian community, gradually allowing joint needs assessments and monitoring, he noted.

Mansourov argued that external factors helped bring about the changes.

“International factors did make a difference in what happened in (North Korea), especially through the introduction of innovative ideas and dissemination of best humanitarian practices,” in addition to foreign aid, he said.

The scholar also argued that while the country’s top leader, Kim Jong-il, does control any institutional changes, there is also adaptation driven by needs.

“There has been some degree of autonomous institutional learning and adaptation; it is incremental in nature and caused by both positive and negative feedback from the environment regarding institutional performance in crisis situations,” he said.

Korea Times
Marcus Noland, Stephan Haggard
9/21/2007

Last summer North Korea conducted provocative missile and nuclear tests. Yet only four months later, Pyongyang signed on to a roadmap that included a return of international inspectors, a full declaration of contested nuclear activities, closing down existing facilities and ultimately disabling them.

American negotiator Christopher Hill predicted this last step could take place as early as the end of the year.

What are the North Koreans up to?

The cynical, some would say realistic, view in the United States _ advanced by departed Bush administration hawks such as John Bolton _ is that Kim Jong-il is raising false hopes.

The appearance of cooperation has several tactical advantages. Sanctions and ongoing uncertainty have had substantial economic costs. The February agreement was preceded by secret meetings in Berlin to resolve the Banco Delta Asia issue.

In return, the North Koreans closed their nuclear facilities, but they have not firmly committed to the difficult aspects of the agreement _ providing a full accounting of their programs, disabling their programs, and giving up actual stores of fissile material and weapons.

Cooperation also drives wedges between the U.S., South Korea and China. If North Korea appears to be making concessions, it is easier for South Korea and China to continue diplomatic and financial support.

Next month, President Roh Moo-hyun will travel to Pyongyang for a summit with Kim Jong-il. Expect him to come bearing gifts to cement his legacy as a peacemaker.

Other politicians in the presidential race have also offered extraordinarily ambitious and generous programs of support for the North as well.

Recent studies we have done on North Korea’s changing external economic relations are consistent with some of this cynical picture, but also suggest a sliver of hope for more substantial change.

To understand why, requires a brief tour of the miserable history of North Korea over the last two decades. Following the collapse of the Soviet Union, the North Korean economy went into a steep decline ending in full-blown famine.

By our estimates, as many as one million people _ five percent of the entire population _ perished in the mid-1990s. Out of the human ashes of this tragedy, however, the North Korean economy began to undergo a profound transformation.

As households and work units scrambled for food, they engaged in barter, trade and new economic activities.

The desperation of the famine also saw an upturn in illicit activities, from missile sales to drugs and the counterfeiting of U.S. currency. But trade and investment also started to flow across the Chinese border.

Chinese companies, small-scale traders and North Korean firms pursued business opportunities, from large-scale mining operations to the import of South Korean videos.

The regime was always hesitant about the emergence of the market. In July 2002, the government initiated economic policy changes that decriminalized some private activities. But reforms have taken a zig-zag path, always subject to reversal.

Sanctions and closer scrutiny have limited the country’s arms sales and illicit activities.
With these sources of revenue increasingly foreclosed, North Korea has two alternatives _ open the economy and increase normal commercial activities or cooperate primarily to obtain aid. In terms of internal change, these two options may actually push North Korea in opposite directions.

Consider the aid tack. Given the regime’s concerns about internal stability, aid could provide a lifeline, allowing the regime to sustain a modicum of current consumption while forgoing deeper reforms. Under this option, North Korea trades away its nuclear program for assistance precisely to maintain the political and economic status quo.

Alternatively, North Korea could use the resolution of diplomatic tensions to deepen the economic reform process.

The military has been engaged in commercial activities and could potentially benefit from such a course. But real reform will reshuffle power and influence within North Korea in ways that are unpredictable and risky.

So what can we expect from Pyongyang? The nuclear program is the regime’s one major asset and we should not expect them to bargain it away easily.

Rather we should expect prolonged and difficult negotiations as they try to extract tribute for their “Dear Leader.”

In the end, we may eliminate North Korea’s capacity for making additional nuclear weapons, but this will not necessarily be accompanied by economic or political reforms.

An important lesson learned elsewhere in the developing world is that aid is not a substitute for reform.

Ambitious schemes for infrastructure and other investment in North Korea will only generate large economic pay-offs if they are accompanied by genuine opening and a more aggressive embrace of the market.

The key issue, therefore, is how tightly South Korea will link its offer of aid to progress in the resolution of the nuclear issue. Properly conditioned, South Korean aid could be a powerful carrot in the nuclear negotiations, whether it ultimately encourages internal reforms or not.

But if the South Korean offers at the summit are large, unconditional and open-ended, they could permit the regime in Pyongyang to stall the nuclear negotiations while actually discouraging deeper reform.

Institute for Far East Studies (IFES)
NK Brief No. 07-9-21-1
9/21/2007

The recent growth in the private-sector economy in DPRK markets and other areas of society has brought with it some significant social changes worth noting. According to most defectors from the North, following the massive famine suffered in the mid 1990s, the biggest change to emerge in the DPRK was the reshuffling of the social class structure. In North Korean society, there are reportedly five identifiable social classes.

The first of these classes is the ruling class, made up of those elite surrounding Kim Jong Il. This class survives off of Kim Jong Il’s government funds, aid sent from South Korea, and from exploitation of the general public.

The second class is made up of business traders with access to foreign capital. A portion of money earned through foreign currency exchange businesses is turned over to the Kim Jong Il regime, while the rest can amassed in order to lead a relatively comfortable life.

The third class is made up of organized thugs who make their money through public trading and markets. These people control regional markets and local trading by using money and violence to employ extortion tactics much like the Russian mafia

The fourth class scrapes by on government rations. This mercantile class comprises an estimated 20~30 percent of the North’s overall population.

The fifth distinct class in North Korea is made up of commoners who support their way of life through farming private plots and selling goods in markets. An overwhelming majority of the population falls into this class; more than 60 percent of the people in North Korea live hand-to-mouth each day on the fruits of their own labor.

The remainder of the population falls beneath even these classes, because they either lack labor skills or are feeble elderly, handicapped, hospitalized, homeless, or wandering from city to city.

For several months I have been meaning to post a review of Stephen Haggard and Marcus Noland’s book, Famine in North Korea, but for thousands of reasons it was always pushed back.

Stephen Haggard and Marcus Noland wrote the definitive book on the DPRK’s Arduous March, and it is required reading for any serious North Korea watcher.

Now…Joshua at One Free Korea has written the definitive review of the book, so I will just put links to his posts: Part One, Part Two, Part Three.

Korea Times
Andrei Lankov
8/19/2007

Sometimes even Stalinist propaganda tells the truth. When the North Korean newspapers occasionally told grossly exaggerated horror stories about South Korean inflation, they stressed that nothing like that could possibly happen in North Korea. This was the case indeed. For nearly half a century, from the late 1950s to the late 1980s retail prices in North Korea remained essentially unchanged. One kilogram of rice cost 0.08 won in 1960. It was still the same price in 1990.

This was possible because almost nothing was actually “sold’’ in North Korea. Communist states often rationed goods distributed through retail trade, but in most cases it was only a handful of most prestigious goods that were subjected to rationing _ like, say, cars. North Korea went much further: by the early 1970s, retail trade in the North ceased to exist, being completely replaced by an elaborate public distribution system. Rations depended on a type of work performed, but also on one’s position within a complicated hierarchy of social groups, as well as one’s place of residence (inhabitants of major cities, and Pyongyang in particular, enjoyed much better rations than those in the countryside).

There were some markets, of course, barely tolerated by the government. But until the late 1980s markets were small, with their trade volume being almost negligible. It seems that most people were reasonably satisfied with what they could get from the state distribution system _ of course, it helped that they knew next to nothing about the situation in other countries, so they could not compare.

The situation began to change around 1990 when the old distribution system collapsed under the pressure of an economic crisis. From 1993-94 there were increasing problems with rations, and from around 1996 rations pretty much stopped altogether. Some food was still distributed in major urban centers, but even there the distributed amount was so meager that nobody could survive on rations alone. A large-scale famine ensued, with at least half to one million dead (the oft-cited figure of three million victims seems to be an exaggeration).

People turned to trade and handicrafts, and with this arrival of a market economy inflation became a North Korean phenomenon as well. Even in the 1980s market prices exceeded the official prices in the state shops. By the mid-1990s, the difference was much greater. In theory, rice still cost 0.08 a kilo, but by 2000 its price on the market reached 45-50 won. Official wages remained unchanged, however, so around 2001 the average salary was approximately 20 times less than the income necessary for physical survival. People had no choice but to augment their income.

The government understood that there was no way to restore the old system: a decade of economic crisis had undermined the basic machinery of distribution and obviously the system was beyond repair. Thus, in 2002 the much trumpeted “July 1 Reforms” were introduced.

It’s difficult to describe these measures as “reforms”–the government simply gave official recognition to the situation which had existed for quite a few years.

The distribution system (long defunct) was curtailed. There was a dramatic increase in the retail prices of basic goods and services _ obviously in an attempt to approximate the prices of the market. Thus, that one-kilo of rice which cost 0.08 won since July cost 44 won.

Wages increased as well. Obviously, the wage increase was not even, and some groups have gained _ or lost _ more than others. It was estimated that the average increase in wages has been approximately 2500 percent (that is, 25 times). At the same time, prices have increased 3000-4000 percent (that is, 30-40 times). This necessitated the issue of 1000 won bills _ the largest denomination in North Korean financial history since the 1959 currency reform. Later, 5000 won bills were issued as well.

But the measures had another effect. The increase in salaries meant that the market was instantly flooded with cash. Needless to say, the only outcome could be inflation. Some people speculated that this was the intention of the Pyongyang leaders who hoped to kick-start the economy in such a way. Perhaps. But I would not be surprised if in 15 or 20 years down the track we learn from interviews and talks with the planners of this reform that they did not really expect inflation. Pyongyang economic managers have not had much exposure to market theory, and are sometimes very naive in their understanding of these questions.

Indeed, by October 2002 the market price of rice had increased to 120 won per kilo. In 2003, the price doubled to 250-300 won, and now it is about 1000 won. Inflation has become a part of North Korean life.

What will happen next? Will the North Korean leaders manage to stabilize the situation, or will a new wave of economic crisis wipe out the entire North Korean system? We do not know yet. But it is clear that there is no return to old days when a kilo of rice could be had for 0.08 won _ that is, if you were lucky enough to live in an area where they distributed grain rations in rice, not in maize.

Korea Times
Andrei Lankov
7/8/2007

Nowadays, the severity of famine appears to be a thing of the past _ at least outside Africa. Indeed, modern technology makes it possible to feed crowded cities almost effortlessly. Thus, any reports of famine nowadays can be argued to be the direct result of mismanagement and deliberate political decisions. The recent North Korean famine of 1996-2000 vividly demonstrates this and supports such a theory.

Stalinist agriculture has never been very efficient. The lack of incentive makes it sluggish and wasteful. However, in some cases, the heavy investments in machinery and fertilizers did, in fact, help to overcome some of the deficiencies created by the inept social system.

This was the case in North Korea. In the late 1950s all North Korean farmers were herded into the so-called “agricultural co-operatives.’’ While less restrictive than the “people’s communes’’ in Mao’s China, they imposed a harsher control than Stalin’s “kolkhozs.’’

The North Korean government invested heavily in agriculture. Its efforts produced a remarkably energy-intensive agricultural system. Electric pumps were running huge irrigation projects; chemical fertilizers and tractors were used on a grand scale. In attempts to reclaim arable land, steep hills were made into terrace fields. These fields, endorsed by Kim Il-sung himself, remained the poster image of North Korean agriculture until the mid-1990s.

Initially these efforts seemingly paid off. In the 1980s North Korea produced some 5-6 million tons of grain (largely, rice and maize) a year. Its population never enjoyed anything like the present-day South Korean abundance: meat or fruits were rare delicacies. Nonetheless, the 6 million tons of grain was sufficient to feed the country’s population. This was done through the rationing system. Depending on one’s position in the complicated hierarchy of social groups, daily rations varied from 500 to 900 grams per adult _ sufficient to provide enough calories.

But in 1991 the situation changed. The much trumpeted “self-reliance’’ of North Korea proved to be a complete fake. The Soviet decision to discontinue sales of oil and other goods at hugely discounted prices wrought havoc in the country’s economy. The agricultural sector was especially vulnerable, since without the heavy input of energy and resources it stood no chance of survival. Tractors required diesel oil, which was not forthcoming, and electric pumps could not operate when power stations were idle due to a shortage of spare parts.

In 1992-1993 the North Korean media began to argue the benefits of having only two meals a day as opposed to the traditional three, claiming the latter was unhealthy and excessive. By 1994, people in some remote areas could not get food for days at a time. They were issued the usual rationing coupons, but no foodstuffs were available in the shops. Rations were also cut. These were signs of things to come.

However, the North Korean government did not follow the example of China or Vietnam, where the return to private agriculture led to an instant revival in food production. In the early 1990s the Pyongyang leaders saw how the reformist Communist governments of East Europe had been wiped out, and they considered any reform potentially dangerous to their own survival. Thus, no reform was undertaken, and in the years 1992-1995 agricultural production continued its free fall.

And then the real catastrophe came. In July and August 1995 unusually heavy rains led to disastrous floods. The North Korean authorities blamed the floods for all subsequent developments. In the aftermath of the disaster, they even decided to break with the decades-old tradition of covering or playing down all the problems of their country. Pyongyang stated that some 5.4 million people had been displaced by the 1995 floods (the subsequent U.N. survey indicated that the actual figure was much smaller _ probably, by an order of ten). Politically, this was understandable: if the country was hit by a natural disaster of unprecedented proportions, the authorities were not to be held responsible!

There is, however, good reason to doubt these statements. After all, the Korean Peninsular is small, but impact of the very same floods on the South was negligible. However, the contribution of the flood to the disaster is undeniable. The already strained power grid was destroyed, and entire irrigation systems were wiped out. Most of the terrace fields, the pride of the “juche agriculture,’’ were simply washed away.

In 1996, the country harvested some 3 million tons of grain _ just above half the pre-crisis level. This meant famine. It was to last for four years and take between half million and one million lives.

For international readers: The Congressional Research Service is an organization that puts together issue briefs and legislative histories for congressional staff.  They are one of the first places US Congressional staff go to learn about a topic.

In April, the Congressional Research Service published a document on the North Korean Economy.  The full report, as well as some past reports, can be downloaded here.

Executive Summary

This report provides an overview of the economy of the Democratic People’s Republic of Korea (DPRK) or North Korea, its external economic relations, attempts at reform, and U.S. policy options. Along with the United States, North Korea’s major trading partners — China, Japan, South Korea, and Russia — form the socalled “six parties,” who are engaged in talks, currently restarted, to resolve issues raised by the DPRK’s development of nuclear weapons.

The economy of North Korea is of interest to Congress because it provides the financial and industrial resources for Pyongyang to develop its military, can be used as leverage in negotiations, constitutes an important “push factor” for potential refugees seeking to flee the country, creates pressures for the country to trade in arms and illegal drugs, is a rationale for humanitarian assistance, is tied to Pyongyang’s nuclear program, and creates instability that affects South Korea and China. The North Korean threat to sell nuclear weapons material could be driven in part by Pyongyang’s need to generate export earnings. The dismal economic conditions also foster forces of discontent that potentially could turn against the Kim regime — especially if knowledge of the luxurious lifestyle of communist party leaders becomes better known or as the poor economic performance hurts even Pyongyang’s elite.

Economic conditions in North Korea currently seem to be improving but have been dismal for those out of the center of power. Mass starvation — eased only by international food aid and other humanitarian assistance — has stalked the countryside. Over the past 15 years, industrial production in North Korea has shrunk considerably. The country has embarked on a program of economic reforms that include raising wages, allowing prices to better reflect market values, reducing dependence on rationing of essential commodities, trimming back centralized control over factory operations, and opening foreign trade zones for international investment.

North Korea has extensive trading relationships with China and South Korea and more limited trade with Japan and Russia. Because of U.S. economic sanctions and lack of normal trade relations status, U.S. imports from North Korea in 2006 were nil, while U.S. exports consisted of $3,000 worth of books and newspapers.  The DPRK has been running an estimated $1.8 billion deficit per year in its international trade accounts that it funds primarily through receipts of foreign assistance and foreign investment as well as through various questionable activities, such as sales of weapons, transporting and producing illegal drugs, and counterfeiting brand name products and currency.

U.S.-led financial sanctions on North Korea have disrupted that country’s trade. In the six-party talks, economic assistance (including fuel oil) is a major bargaining chip. Economic policy options include increasing or easing economic sanctions, preventing shipments of illicit cargo, normalizing relations with Pyongyang, negotiating a trade agreement, allowing the DPRK to join international financial institutions, and removing the country from the terrorism list. This report will be updated as conditions warrant.

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
Choi Myung Chul
4/19/2007

I defected at a young age and arrived in South Korea in 2004, where I was admitted into third of year of middle school. In North Korea, I had been attending school and was in second year high school.

At first, I found it difficult assimilating into a South Korean school. Social interests were different and the fact that 9 out of 10 South Korean children enjoyed going to an internet café and playing games was intriguing on its own. Though I find computer games challenging and fun today, back then it was hard enough trying to figure out a computer, let along mastering a game.

There are no opportunities to see computers in North Korea. That’s because no one owns a computer. Comparatively, North Korea is like South Korea in the 1970’s. I played outside with top spins, paper-flipping, slides and soccer. I also caught fish as our family lived in Hoiryeong nearby the Tumen River, though catching fish was not only a game but our means of survival.

At that time, the greatest obstacle to our play was hunger. When you run around and play, you need food to regain your energy. There were even times we had no strength to sit up and play. Rather we lay, slumped. During those times, we sat around day-dreaming. We would play truth or dare and pretend to smoke with cigarette butts we had secretly collected and talked nonsense while lamenting over our lives.

Satisfying hunger through the generosity of an affluent friend

We often had fights with kids from other schools. There was one incident where a child even got his head seriously hurt, but back then your friends were all you had. Even as we lay lifeless, I felt secure because of my friends.

Though I was starving, I even got to watch TV, that is during the short times our village was supplied energy. Though the majority of us were poor, one of my friends had a TV in his home, as his mother had done well at the markets. Even though only one station was broadcasting, the North Korea program, it was still very fun. I remember seeing one movie, “Order 027” which was about the People’s Army invading the Blue House (South Korea’s presidential building). The action wasn’t too bad, even interesting to a point.

Once in a blue moon, a friend would come into some money and then we would go to the markets to buy snacks. We bought bread made of corn powder and tofu rice. Even though the serving was small, my friend always shared his food with me.

Actually, all our friends did this. It was a time where we were all starving, yet we were willing to share our food, even half a corn cob.

Then one day, my mother left and I starving of hunger, left for China. On my way to Dalian in search for relatives, I was caught and forcefully repatriated back to North Korea. So I went looking for my best friend Hakjoo. Hakjoo and I had grown up together and had experienced so many things including severe hunger.

Offer to escape but offer denied

I informed Hakjoo of my plans and tried to persuade him to come. He replied, “Nevertheless, my homeland is here. If I died, I am going to die here. I cannot go with you.” We got into a huge argument and he said I had been brainwashed by capitalism.

Ever since we were little, we studied that Chosun (North Korea) was a socialist paradise and learned of Kim Jong Il and Kim Il Song’s revolutionary history. Even at that time, many of us were ignorant of the outside world. My friend’s loyalty to the great leader stood firm and he denied leaving our motherland.

By the time I had seen and heard of China, my devotion to Kim Jong Il had disappeared. I tried to convince Hakjoo that China was rich in food and much more abundant than North Korea but, failed to persuade him. I remember him saying, “Still. How can I desert our leader and our motherland?”

Hakjoo did not agree with my dreams but he still wished me health and safety. He also promised me that he would not report me to the authorities and said, “Don’t worry. But you must go in safety. Do not get caught and be safe.”

North Korea is a society where each person regulates one another. It is a society where trust is nonexistent. However, I trusted that friend and because I believed that he would not report me, I was able to safely defect the country.

As I left, I said to me friend, “I will return without fail… I’ll see you then.”

That was ’98. I found my way to my relatives home in Dlian, worked as a farmer in China for 3 years and then at a restaurant for 3 years.

At first, I planned to live in China. I had no intention of coming to Korea as I felt it would then be harder for me to return to North Korea. However, I could not continue to live hidden as an illegal immigrant and in the end, I followed the footsteps of another friend in 2004.

Whenever I face a hard time I think, ‘If I came with Hakjoo, it wouldn’t have been so hard,’ If we had defected together, the hardships in China and the loneliness would not have been so bad.

No matter how difficult the task, that friend always pulled through. However, he is not here now and so all the decisions have to be made by me. It’s tough because there is not one person I can fully trust and be dependent on.

But I am going to live well. Every day, I have just enough to scrape by and though it’s not easy, I am attending university. When I return to North Korea one day, there are many things for me to do. My dream is to construct a company there and rebuild a North Korea that has fallen to devastation.

And above all, I study because I made a promise to my friend. When I return to my hometown, my aim is to meet my friend standing tall and proud.