North Korean Economy Watch

The official UN web page is here.

Here is the description:

Conducted in all provinces of DPRK from September 17th to October 17th, 2012, the National Nutrition Survey was a joint collaboration between DPRK Government, involving the Central Bureau of Statistics (CBS), the Child Nutrition Institute, the MOPH and the National Coordination Committee as well as WHO, WFP and UNICEF.

Amongst others, the results of the survey show that Stunting remains an area of great concern in DPRK. About 28% of Korean children are stunted (Chronic Malnutrition) with provincial disparities. Acute malnutrition (4%) is present and varies according to provinces but even if the prevalence is not alarming, support is still needed to treat these children because of the high mortality risk associated with acute malnutrition. The survey also provides detail on children’s and women’s feeding practices.

You can download a PDF of the report here.

I have added this report to my “DPRK Economics Statistics Page”.

According to Yonhap:

North Korea’s grain and fertilizer imports from China nosedived in January, Seoul’s Korea Rural Economic Institute said Sunday, citing data from the Korea International Trade Association.

North Korea imported 2,174 tons of grain and 2 tons of fertilizer from China in the first month of this year, the institute said. By product, flour imports totaled 1,172 tons and corn imports reached 540 tons.

The volume of imported grain marked a mere 9.2 percent of the North’s imports of Chinese grain in the previous month, while the corresponding figure for fertilizer amounted to 20 percent, the institute said.

Compared with the same month of last year, the figures reached 25.9 percent and 0.03 percent, respectively.

“The steep decline in the North’s grain imports from China is very unusual, even considering the past trend of grain imports decreasing every January,” said Kwon Tae-jin, a researcher at the institute.

Read the full story here:
N. Korea’s grain imports from China plunge in Jan.
Yonhap
2013-3-3

Institute for Far Eastern studies (IFES)
2013-1-31

The total amount of assistance provided to North Korea by the South Korean government and private organizations in 2012 decreased by 28 percent against 2011, which marks six years of continuous decline.

The Ministry of Unification revealed on January 27 that the total amount of South Korean assistance to North Korea tallied 14.1 billion KRW (13 million USD), with 2.3 billion KRW (2.12 million USD) of government aid for vaccines and medical trainings and 11.8 billion KRW (10.89 million USD) from the private sector for medical supplies. This is a 28.1 percent drop from the previous year’s total of 1.96 billion KRW (18.09 million USD).

The South Korean government sent about 6.5 billion KRW (6 million USD) of medical supplies to North Korea via UNICEF and the private sector sent about 13.1 billion KRW (12.1 million USD) of malaria prevention supplies, powdered milk, soy milk, and flour.

Last year was the lowest record for humanitarian assistance to North Korea in sixteen years. Prior to this low was 1996, which recorded 3.6 billion KRW (3.3 million USD).

Lee Myung-bak administration’s aid to North Korea for the last five years reached a total of 257.5 billion KRW (236.2 million USD), with 102.4 billion KRW (93.94 million USD) in government funds and 155.1 billion KRW (142.3 million USD) from the private sector. This is equal to only 20 percent of the Roh Moo-hyun administration’s 1.275 trillion KRW (1.17 billion USD), and 44 percent of the Kim Dae-jung administration’s 582.9 billion KRW (534.8 million USD) of total aid to North Korea.

The highest record for South Korean humanitarian aid to North Korea was in 2006 at 298 billion KRW (273.4 million USD), in both government and private sector aid and continued to remain at a high level in 2007 with 289 billion KRW (265.1 million USD) in 2007. However, with the launch of the Lee Myung-bak government in 2008, it dropped to 116 billion KRW (106 million USD), and continued the downward slide recording 67.1 billion KRW (61.6 million USD) in 2009; 40.4 billion KRW (37.06 million USD) in 2010; 19.1 billion KRW in 2011 (17.5 million USD); and 14.1 billion KRW (12.9 million USD) in 2012.

The source of the drop in humanitarian assistance can be attributed to deadlocked inter-Korean relations followed by the shooting death of a Mount Kumgang tourist in 2008; long-range rocket launch and second nuclear test in 2009; and Cheonan and Yeonpyeong Island incidents in 2010.

From 1995 to 2012, the total amount of humanitarian aid to North Korea from the South Korean government was 1.48 trillion KRW (1.36 billion USD) and from the private sector was 871 billion KRW (799.1 million USD), equating to about 2.347 trillion KRW (2.15 billion USD) in total.

Meanwhile, international humanitarian aid to North Korea increased 30 percent in 2012 against the previous year. According to the United Nation’s Office for the Coordination of Humanitarian Affairs (OCHA), total aid to North Korea in 2012 was 113 million USD while the previous year reached 89.2 million USD. It quadrupled to the total amount, 24.4 million USD of 2010.

Nineteen countries joined in the effort to provide humanitarian aid to North Korea such as South Korea, Norway, Switzerland, Canada, Russia, Brazil, and Sweden. In 2010, there were only six countries, and it later increased to seventeen countries in 2011. The OCHA announced that the humanitarian aid provided in 2012 focused mainly on improving the food supply and nutrition, and provided agricultural support.

UPDATE: Here is a similar report in Yonhap (2013-1-27):

South Korea’s humanitarian aid to North Korea dropped 28 percent to a record 16-year low last year, the unification ministry said Sunday, as the cross-border relations remained chilled under Seoul’s outgoing government of President Lee Myung-bak.

Seoul’s humanitarian aid to the impoverished North totaled 14.1 billion won (US$13.1 million), compared with 19.6 billion won a year earlier. Last year’s amount is the lowest since 1996 when only 3.6 billion won was provided to the North in humanitarian aid.

The sharp drop came as relations between the two Koreas remained frozen since the North sank a South Korean warship near their Yellow Sea border in March 2010 and then shelled a border island in November that year. Pyongyang’s nuclear test and rocket launches also affected their ties.

The total amount of assistance the South provided the North during the five years of President Lee was 257.5 billion won, including 155.1 billion won of civilian aid. The total amount is only 20 percent of the aid sent during the presidency of Lee’s predecessor, the former late President Roh Moo-hyun.

According to Bloomberg:

North Korea’s trade with China expanded more than 60 percent to $5.63 billion in 2011 [...]

Commerce with China accounted for 70.1 percent of the North’s total $8 billion trade in 2011, up from 57 percent in the previous year, South Korea’s national statistics office, Statistics Korea, said in its annual report today in Seoul. North Korea does not report economic data. Inter-Korean trade amounted to about $1.71 billion in the same year.

…

Excluding a dip in 2009, trade between the two countries has increased every year since the start of 2000, when the statistics bureau started releasing estimates. Data for 2012 will be released around the end of next year.

North Korea’s economy expanded 0.8 percent in 2011 and gross national income per capita was 1.33 million won ($1,239), nearly one nineteenth that of South Korea’s 25 million won, according to the Bank of Korea. South Korea’s total nominal gross national income was 38.2 times that of the North’s 32.44 trillion won.

The regime imported 3.8 million barrels of crude oil for 2011. Power generation capacity was 6.9 million kilowatts, less than one-10th that of South Korea. Steel production was 1.23 million tons and production of chemical fertilizer production was 471,000 tons.

North Korea’s population rose to 24.3 million in 2011 from 24.2 million the previous year — about half of South Korea’s. Population estimates were based on North Korea’s 1993 and 2008 censuses.

The Los Angeles Times also reported on these findings.

Here is coverage in Business Insider.

The Statistics Korea page for North Korea can be found here.

Read the full story here:
N. Korea’s 2011 China Trade Grew More Than 60 Percent
Bloomberg
Sangwon Yoon
2013-1-2

Download the full report (PDF) here.

I have also added it to my “DPRK Economic Statistics Page”.

Here is the Executive Summary:

The last nationwide survey including nutrition indicators was the Multiple Indicator Cluster Survey (MICS) carried out in 2009. It showed that 32.4% of children

The present survey was therefore needed to update the indicators for the population nutritional status. All 10 provinces have been included. Data collection was done from September 17th to October 17th 2012.

The methodology is based on SMART and MICS surveys. It is a clustered, stratified by provinces, two-stage sampling survey. The target population includes children under 5 and their mothers. The sample size per province is 400 children in Pyongyang municipality and 812 children in all other provinces for most indicators.

Chronic malnutrition, despite a modest drop since MICS 2009 (from 32.3% to 27.9% at national level) remains in the ranges labelled ‟medium‟. Stunting has irreversible impact on the development of children as a result on the Country development. The prevention of stunting in early life (starting during or even before pregnancy) as well as the prevention of anaemia in mothers and their children (mainly those under 2 years old) through different multi-sectoral interventions combining nutrition, health, WASH, social protection, food security and agriculture requires more efforts and resources.

The survey also shows a picture of the acute nutritional status of children modestly improved since 2009. The situation is not critical and does not suggest emergency operations. However, attentions need to be paid to such factors as essential medicines, WASH situation and food security which affect the vulnerable children. The presence of acute malnutrition in women is also of concern. Programmes like the management of acute malnutrition at hospital and community levels (CMAM) need to be continued and expanded. Provision of nutritious food for children at institutions should also continue. On-going monitoring of the nutritional situation is important to identify the trends and changes in the situation and bring support as soon as possible when the situation is negatively changing.

In reference to the MDG 1, the achievement in decreasing underweight over time (from 60.6% in 1998 (MICS1 to 15.5% in the actual survey), as well as chronic and acute malnutrition, are primarily due to concerted efforts between the Government, the UN Agencies and others partners in DPRK in addressing the different causes of malnutrition. But malnutrition still remains and requires continued and strengthened interventions on chronic and acute malnutrition in order to have more impact on the underweight prevalence and to ensure a more optimal growth to the children.

UPDATE 5 (2012-10-15): China is donating USD$1m to the UN World Food Program for use in the DPRK. Accoridng to ReliefWeb:

The Government of China has recently announced a contribution of US$1 million to WFP’s operation in DPR Korea. The donation will be used to assist children and their mothers who are most vulnerable to undernutrition.

In July 2012, WFP started a new operation in DPR Korea, focused on providing nutritional support to women and children most at risk of malnutrition. Much of the food distributed comes in the form of Super Cereal – specialised nutritious foods designed to address vital mineral and vitamin gaps in the regular north Korean diet.

The generous contribution from China will be used to buy around 1550 metric tons of maize, which will be the base ingredient for Super Cereal manufactured in DPR Korea and then distributed for one month to 400,000 children in hospitals, orphanages, and kindergartens. Pregnant and nursing mothers will also receive food rations.

WFP is in urgent need of an additional 30,000 metric tons of maize and 4,000 metric tons of cooking oil to ensure that the most vulnerable women and children in DPR Korea receive the nutritional assistance they need of the coming winter months.

China is an increasingly important donor to WFP, contributing over US$20 million to WFP operations in 2011.

UPDATE 4 (2012-10-5): According to KBS, the South Korean NGO Council for Cooperation with North Korea delivered flour to Pyongyang:

The delivered the 260 million won worth of aid to Gaeseong to help North Korean residents suffering from the natural disasters through the Inter-Korean Transit Office. It plans to deliver an additional 500 tons of flour within this month.

Eleven representatives of the council, which represents 55 domestic humanitarian aid donors to the North, crossed the border to the North to send the flour.

UPDATE 3 (2012-9-24): Radio Free Asia reports (in Korean) that Agape International will be sending 21 tons of baby food to the DPRK.  See the original article here.  See the article in English via Google Translate here.

UPDATE 2 (2012-9-24): Russia just recently forgave the DPRK’s Soviet-era debt and opened a Russian-gauge railway line to Rason, where they lease a pier. Additionally, the Russians are interested in building a gas pipeline that extends to South Korea. They are also providing Food assistance via the UN World Food Program to the DPRK. According to Itar-Tass:

Russia has delivered more than 4,000 tonnes of flour to North Korea, the Emergencies Ministry’s Information Department told Itar-Tass on Monday.

According to the Emergencies Ministry’s representative, the aid to North Korea was rendered in the format of the memorandum of mutual understanding signed between the Russian government and the United Nations’ World Food Program.

“Over 4,100 tonnes of flour were delivered to North Korea by sea. A vessel with another batch of the same weight of flour is planned to be shipped out from the Nakhodka seaport to the North Korean seaport of Chongjin on September 27,” the Information Department said.

UPDATE 1 (2012-9-19): Indonesia will also be sending food assistance through the UN World Food Program. According to the Jakarta Post:

Indonesia will send food aid worth US$2 million in hopes of improving the famine crisis in North Korea, said Coordinating Peoples Welfare Minister Agung Laksono on Wednesday.

“[We] have coordinated with the National Disaster Mitigation Agency (BNPB) to send aid to the World Food Program (WFP), which will later distribute it to citizens of the Democratic People’s Republic of Korea,” he said in Jakarta as quoted by tempo.co.

Agung also hoped that the humanitarian aid, which was initiated by President Susilo Bambang Yudhoyono, would strengthen diplomatic ties between the two countries.

North Korea is in a food crisis after its crops and food reserves were damaged by extreme weather.

After receiving news of the support, North Korean Ambassador to Indonesia Ri Jong Ryul cited a Korean proverb that says “a real friend’s quality is shown in the time of hardship.”

ORIGINAL POST (2012-9-20): The DPRK is to receive at least 1,000 tons of flour from two different donors.  These donors are were World Vision and JTS Korea, a Seoul-based Buddhist relief agency. Both gave 500 tons each via different channels. Interestingly, the World Vision assistance crossed the DMZ in trucks from South Korea.  The assistance from JTS was shipped from South Korea to Dandong where it will be exported to the DPRK.

Some coordination might be in order?

See more below.

According to the Associated Press (via Calgary Herald):

North Korea has accepted a shipment of emergency aid from relief agency World Vision to help victims of floods that killed dozens of people and submerged large amounts of farmland.

Twenty trucks carrying 500 tons of flour crossed the border into North Korea on Friday. World Vision says the aid will be sent to children in the North’s central South Phyongan (PYONG-ahn) province.

South Korean civic associations are also sending assistance. According to the Korea Times:

JTS Korea, a Seoul-based Buddhist relief agency, said a freighter carrying 500 tons of flour left the port of Incheon, west of Seoul, and will soon arrive in North Korea via the Chinese port city of Dandong on the border with the North.

The civilian aid for North Koreans was sent after the North was hit by severe floods in recent months, which left hundreds of people killed or missing.

“Our officials plan to visit North Korea in the near future to monitor the distribution of aid,” a JTS Korea official said.

The shipment came after North Korea last week rejected an offer by the South Korean government to donate 10,000 tons of flour, instant noodles and medicine as flood aid.

Officials at Seoul’s Unification Ministry in charge of North Korean affairs said Pyongyang turned down the proposal and openly displayed anger at Seoul’s refusal to give what the North said it needs most — rice and cement.

Read the full stories here:
North Korea accepts emergency aid from World Vision to help flood victims
Associated Press
2012-9-20

S. Korean civic group sends flood relief to NK
Korea Times
2012-9-20

Pictured above: UN World Food Program map of affected areas.

According to the World Food Program web page:

WFP is sending a first batch of emergency food aid to flood-hit areas in the south of Democratic People’s Republic of Korea (DPRK) where torrential rains have left 88 people dead and over 60,000 people homeless.

The emergency food assistance will provide the flood victims with an initial ration of 400g of maize per day for 14 days.

Storms and heavy rain across the country between 18 and 29 July have caused widespread flooding, and in some places severe damage to homes, infrastructure and farmland. The most affected counties are Anju City and Songchon in South Pyongan Province, and Chonnae in Kangwon province.

A UN mission recently which recently travelled to flood-affected regions found considerable damage to maize, soybean and rice-fields damage (Read report). WFP continues to monitor the situation.

A comprehensive assessment of the food situation and of prospects for food production is scheduled for September.

The New York Times also reported on this story.

UPDATE 1 (2012-8-6): Vietnam is donating food to the DPRK.

UPDATE 2 (2012-8-7): The Red Cross is distributing aid in the DPRK.

UPDATE 3 (2012-8-8): The UN has created a portal through which all of the UN agencies are posting information. See it here. See here information on “Who is doing what”.

UPDATE 4 (2012-8-10): China donates US$1 in assistance to the DPRK.

Institute for Far Eastern Studies (IFES)
2012-6-22

China began to provide large-scale food assistance to North Korea from late February, reported KOTRA (Korea Trade-Investment Promotion Agency) in its recent report.

The Korea Business Center (KBC) in Canton, KOTRA’s overseas branch, released a report about the details of China’s food assistance to North Korea. “China is the largest supplier of material goods to North Korea but even the major North Korean experts in China do not have the exact figures of aid provided to North Korea.” Based on the information gained from local media and interviews with experts, “North Korea requested food assistance of at least 200,000 tons, as well as assistance in construction materials. The amount is estimated at more than 600 million yuan RMB.”

According to Chian Grain Reserves Corporation and Dalian Commodity Exchange, 6,600 million yuan RMB is equivalent to 150,000 tons of rice or 26.5 million tons of corn, calculated with the wholesale price in the Northeast China region. 600 million yuan RMB of rice exported to Shinuiju from Dandong can purchase about 17.1 million tons of rice.

Old rice and flour is being gathered in Dandong from all over China, and is being sold to North Korea at a very low cost without ever entering the Chinese domestic market. The KBC report evaluates that this is a welcomed change because North Koreans are not selective about their food, since they do not have enough money to buy food. It reports, “Cheap food is considered the best food,” and “North Korean customs automatically allows the food to enter the country and small amounts of a few tons of food is not even tariffed,” said an unnamed North Korean trader.

China’s recent food aid to North Korea was conducted largely in two ways: First, it was provided quietly without the public being notified; second, it went via the World Food Programme (WFP) and other international organizations. According to the WFP China Office, the recent 600 million yuan food aid to North Korea was not related to WFP aid to North Korea.

China is careful about releasing information related to its food aid to North Korea. However, what is known is that the aid consists of selling food at a low-cost and through nongovernmental exchanges. There are several trading companies in Dandong that ships food and other materials to North Korea when charitable organizations in Beijing make the request for shipment.

On the other hand, the May 24 (2010) Measures (of South Korea) has suspended all trade between North and South Korea. This has propelled North Korea-China trade to expand and the trade volume between the two nations increased 32 percent or 1.9 billion USD from January to April, compared to the same period of the previous year, according to the Korea International Trade Association.

During this period, North Korea’s export to China recorded 793 million USD, which also jumped 33 percent against last year and the revenues from import also increased 32.8 percent equalling 1.16 billion USD.

UPDATE 1 (2012-7-15):  South Korea claims the DPRK missed a deadline for explaining how it intended to repay South Korean “loans”. According to Yonhap:

North Korea missed the deadline Sunday for notifying South Korea of how it will repay millions of dollars in loans provided in the form of food in 2000, resulting in Seoul having the right to declare Pyongyang has defaulted on its debt, an official said.

South Korea sent the North a message on June 15 that the communist nation was supposed to have paid back US$5.83 million in the first installment of a 2000 food loan worth $88.36 million by June 7. The North was required to respond to the message in 30 days.

That deadline passed on Sunday with the North remaining silent, giving South Korea the right to declare the North has defaulted on the debt, according to a government official in Seoul.

But South Korea is unlikely to go ahead with the declaration any time soon as it would have little effect on the North. The communist nation remains largely outside of the international financial system and the prospect of national default is unlikely to force it to repay its debt.

Officials said they are considering sending Pyongyang a message again calling for debt repayment.

Widespread views are that it won’t be easy for the North, which is still struggling with food shortages, to pay back its debt, but officials said the country could repay the debt in kind as it did before. In 2007 and 2008, the North repaid some debt with $2.4 million worth of zinc ores.

After the two Koreas held their first-ever summit in 2000, South Korea provided the North with a total of US$720 million in loans of rice and corn until 2007. Including interest accrued on the loans, the North is required to repay some US$875 million by 2037.

Such aid has been cut off after the South’s President Lee Myung-bak took office with a pledge to link any assistance to the North to progress in international efforts to end Pyongyang’s nuclear weapons programs.

The Daily NK also covered the story.

ORIGINAL POST (2012-6-8): According to Yonhap:

North Korea has not shown any signs of repaying the loans South Korea extended in food grains since 2000 although the initial day of the scheduled repayment passed as of Thursday. The South Korean government provided North Korea grain loans worth US$725 million for seven years until 2007, including 2.4 million tons of rice and 200,000 tons of corn. The total principal and interest North Korea should repay for the next 20 years is estimated at $875.32 million.

North Korea was scheduled to pay South Korea $5.83 million by Thursday for the loans extended to it in 2000. Korea Eximbank, which is in charge of trade finance with the North, notified its counterpart the Chosun Trade Bank of North Korea of the repayment obligation Monday but North Korea had not responded of Friday.

The former South Korean governments led by President Kim Dae-jung and Roh Moo-hyun provided an estimated 1 trillion won (US$850 million) to North Korea from 2000 to 2007 under the sunshine policy. South Korea provided an additional 1.37 trillion won to North Korea to finance the construction of a light water reactor in order to suspend North Korea’s nuclear development. All the loans to the North were taxpayer’s money.

…

North Korea should show sincerity in the repayment of these loans for the sake of its future. If it fails to do so, the North will encounter substantial difficulties in accessing further loans from the international community. North Korea also has failed to repay loans it borrowed from the old Soviet Union. Russia reportedly had to reduce 90 percent of the Norths loans, worth $11 billion.

If North Korea has difficulties repaying its debts to South Korea in cash, it should sincerely discuss alternative measures to repay the loans with the South Korean government.

The South Korean government should positively consider measures to get the money back in kind, such as in mineral resources. North Korea should understand that if it fails to show the minimum sincerity on the repayment of its debts, it will experience much more difficulty in attracting economic assistance from the outside world.

The Choson Ilbo reports this additional information:

In 2007 and 2008, South Korea also gave the North $80 million worth of raw materials to produce textiles, shoes and soap. At the time, North Korea repaid 3 percent of the loan with $2.4 million worth of zinc ingots. Repayments of the remaining $77.6 million become due after a five-year grace period, so North Korea must start repaying $8.6 million a year every year for 10 years starting in 2014.

Seoul also loaned Pyongyang W585.2 billion (US$1=W1,172) from the Inter-Korean Cooperation Fund so it could re-connect railways and roads with the South that were severed in the 1950-53 Korean War. And it provided W149.4 billion worth of equipment to the North. The North must repay that loan in 20 years with a 10-year grace period at an annual interest of 1 percent.

It also seems unlikely that South Korea will be able to recoup W1.37 trillion plus around W900 billion in interest it provided North Korea through an abortive project by the Korean Energy Development Organization to build a light-water reactor.

The loans amount to a total of around W3.5 trillion, which the South will probably have to write off.

The Daily NK also reported on this story.

Read the full story here:
North Korea should show sincerity in repaying South Korea loans
Yonhap
2012-6-8

N.Korea Misses 1st Loan Repayment Deadline
Choson Ilbo
2012-6-8

According to the Jakarta Globe:

President Susilo Bambang Yudhoyono has agreed to send $2 million in aid to North Korea, a move that is expected to create closer ties with the reclusive country but which has already drawn criticism from rights activists.

Foreign Minister Marty Natalegawa said the decision was driven purely by humanitarian motives, but analysts quickly suggested that the aid could be seen as an attempt by Jakarta to cozy up to Pyongyang after Kim Yong-nam, chairman of the Presidium of the Supreme People’s Assembly, visited earlier this month.

“We have considered the decision for a long time,” Marty said on Wednesday at a hearing with lawmakers in Jakarta.

“However, we’re still facing technical obstacles on how to ensure this humanitarian aid ends up in the hands of those who need it, not for other purposes.”

He said the government was considering working with the United Nations World Food Program or Unicef to ensure the funds reached the North Korean people.

Read the full story here:
Activists Criticize Jakarta’s $2m Gift To North Korea
Jakarta Globe
Ismira Lutfia
2012-6-1