Archive for the ‘Uncategorized’ Category

North Korea’s harvest numbers: what “food production” really means

Monday, March 11th, 2019

By Benjamin Katzeff Silberstein

I wrote about the confusing harvest numbers this past Friday, and I’ve been able to find little new information to make things clearer. Basically, the problem is that talking about “food production” is too vague, since that can mean a lot of different things. In the standard World Food Program/FAO crop assessments, there are usually two numbers quoted: one estimate for total production of food,  and one for “milled cereal equivalent”, a standardized measurement used to translate the varying nutritional contents of different crops into a standardized weight measure.* (See below for a more detailed explanation.) Basically, the “milled cereal equivalent” figure tends to be significantly smaller, by about 20 percent or so, than the original, total food production figure.

Since we don’t actually know exactly which number is being thrown around in analyses of the current harvest, I’ve calculated a possible milled-equivalent harvest figure, using the average difference between milled and unmilled for the years where I have the two different numbers from the WFP/FAO crop assessments. None of the historical estimates I’ve found correspond with the harvest numbers for previous years in the 2019 UN Needs and Priorities Plan. Crop production figures are usually given in terms of “marketing years”, not in calendar years. For simplicity’s sake, I denote each year by the second half of the marketing year, when most consumption will occur. So “2019” is the 2018/2019 marketing year, “2018” is the 2017/2018 marketing year, et cetera.

The following shows the scenario where the 4.95 million tonnes production figure is the “unmilled” cereal equivalent measure. Based on the average difference between milled and unmilled for the years where I’ve had data available from UN institutions (0.85 million tonnes), I’ve added and subtracted to complete the figures where necessary. This is not an exact, scientific way of looking at the harvest numbers. For exact accuracy, I’d need to calculate the milled cereal equivalent of each crop, something I don’t have time to do right now. This may well make the figure even lower. (Hazel Smith’s figure, for reference, is 3.2 million tonnes.) But the following does, at the very least, give a sense of the proportions at hand. And it makes the numbers look different from my initial assessment.

Food production, million tonnes (unmilled) Food production, million tonnes (milled)
2009.00 4.20 3.30
2010.00 5.17 4.32
2011.00 5.33 4.50
2012.00 5.50 4.66
2013.00 5.80 4.90
2014.00 5.98 5.03
2015.00 5.93 5.08
2016.00 5.92 5.07
2017.00 6.03 5.23
2018.00 5.75 5.00
2019.00 4.95 4.10

Table 1. Figures are sourced from various assessments by the WFP and FAO; contact me for exact sourcing on specific figures. 

Graphically, the trend in food production in milled terms, i.e. the lower-end, more realistic figure of how much food is available for consumption, using the above assumption for the 2019-figure, looks like this:

Graph 1. Estimate food production in North Korea, million tonnes, in milled cereal equivalent terms.

In short, this does give a rather grim and highly problematic food situation, putting the quantity of the harvest at 4.10 million tonnes. It puts North Korea back to a state of food production prior to 2010–2011, when harvest started to climb. And now, North Korea receives far less aid than it did a decade ago. Plus, its imports will only amount to 200,000 tons, the government seems to be saying, a similar amount to what it procured in imports and humanitarian aid in 2016/2017, when the harvest was much larger.

For long, this is how low North Korean harvests were. Only a few years ago, this would have looked like a rather solid harvest. Looking back in the future, it might turn out that the past few years of food production growth, since around 2011, was an abnormally good period of time. None of this means that this food situation is anything but poor.

To me, among the figures I’ve been able to find, it’s the only one that make sense in the context of the statement from UN representatives that this harvest was the worst “in a decade”. Hopefully things will become clearer over the coming days and weeks, as more information may be published, in which case I’ll update this post.

In sum, the actual food available in North Korea is, in all likelihood, much lower than the 4.95 million tonnes-figure quoted by the UN and the North Korean government. As the following graph shows, even using the North Korean government’s figures, the drop from last year doesn’t appear all that massive. But on closer inspection, the actual quantity of food available may be significantly lower than the figure the North Korean government states, as I’ve tried to show in this post.

Graph 2. Food production in North Korea, from the UN’s “2019 Needs and Priorities” report on North Korea.

Finally, a note on the issue of the markets and the public distribution system. I maintain that it’s impossible to get a sense of total food availability and circulation in North Korea as a whole, without taking the markets into account. According to most studies we have, the majority of North Korea’s population rely on these markets, rather than the public distribution system, for their sustenance.

But one has to acknowledge that just like the UN and North Korean government figures may not reflect the whole situation accurately, there may be a fair bit of bias in the data on the prevalence of the markets too. Most of this data comes from surveys done with defectors in South Korea. They overwhelmingly tend to come from the northern provinces of the country, closer to China, where market trade has traditionally been more prolific. Most sources for news from inside North Korea are based in the northern parts of the country, where one can get access to Chinese cell phone network coverage.

There’s likely another form of bias present in these surveys, too. Most people who are reliant on the PDS for their sustenance are likely underrepresented among defectors. People in state administration and security organs, for example, are less likely to leave North Korea, though that of course happens too. And in any case, we’re talking about a quite large demographic of people, whose livelihoods would be significantly impacted by cut rations. Such cuts are already happening, Daily NK reports, with some professional groups receiving only 60 percent of  what they otherwise would. The PDS may have changed shape and function quite drastically since the early 2000s, but it may also be more important to the North Korean public than the currently available survey data and reports from inside the country tells us.

Conclusion

North Korea’s food situation, though not at famine-time levels, does appear to be dire. The figures, in combination with reports from inside the country, gives serious cause for concern. Government numbers may not tell the full story since they likely underestimate the role of the markets. Nonetheless, things do look serious. The government could easily alleviate the situation by changing its spending priorities and policies. Chances are that it won’t.

Footnote:

*I’m borrowing here a footnote from a 38 North piece by the late scholar Randall Ireson, whose archive of articles remain one of the best sources for information on North Korean agriculture:

The FAO has consistently used grain equivalent (GE) values for the major crops to compensate for varying moisture and energy content. Thus, husked rice (GE) is .66 of the paddy weight, potatoes (GE) are .25 of the fresh weight, and soybean (GE) is 1.2 times the dry weight because of the high oil and thus calorie content.

Share

North Korea’s economic situation, going into Hanoi: a roundup of the data

Thursday, February 21st, 2019

By Benjamin Katzeff Silberstein

The Hanoi summit is under a week away, Daily NK recently put out new market price data, and I’ve finally had time to update my dataset. There seems like no better time than the present to take a look at some of the numbers we have available for the North Korean economy, thanks to outlets such as Daily NK and Asia Press/Rimjingang.

Currency

Let’s start with the exchange rate. A few weeks ago, the (North Korean) won depreciated quite significantly against the USD, which I wrote about here. At 8,500 won/1usd, the USD-exchange rate on the markets hit its highest point since the inception of “maximum pressure”. The graph below is shows the average market exchange rate in three North Korean cities for won-to-USD.

Graph 1. Average won-USD exchange rate on markets in three North Korean cities, spring of 2017–February 2019. Data source: Daily NK.

As the graph shows, the won rebounded somewhat after the initial spike in early January. According to the latest data point, the exchange rate stands at 8190 won, still somewhat higher than the average for the period, 8136, but barely.

What could have caused this spike? One possibility is that the government has started to soak up more foreign currency from the market, because the state’s foreign currency coffers are waning. After all, given the vast trade deficit, the continued necessity of spending hard currency on things like fuel (bought at higher prices through illicit channels to a greater extent) and other factors, it would make a great deal of sense. Currencies fluctuate all over the globe, sometimes based even on loose rumors that fuel expectations. One anonymous reader who often travels to North Korea for work heard from Korean colleagues that accounting conditions for firms had gotten stricter, likely because the government wants to be able to source more foreign currency from the general public.

It is also noteworthy that while the Daily NK price index reports that the USD-exchange rate has gone back to more normal levels, the Rimjingang index remains at very high levels. Its latest report (February 8th) has the USD at 8,500, and on January  10th, it registered 8,743 won, a remarkably high figure that the Daily NK index hasn’t been near since early 2015. The difference between the two may simple come from the figures being sourced from different regions, or the like. North Korea’s markets still hold a great deal of opportunity for arbitrage, not least because of the country’s poor infrastructure.

So, it does seem like there may be some unusual pressure on the won against the dollar. What it comes from is less clear, but the state demanding more hard currency from the semi-private sector and others may be one important factor. In any case, we shouldn’t be surprised if the trend continues, unless sanctions ease soon.

At the same time, while the RMB has appreciated against the won over the past few weeks, it hasn’t really gone outside the span of what’s been normal over the past few years.

Graph 2. Average exchange rate for won to RMB, average of three North Korean cities, late 2015–early 2019. Data source: Daily NK.

The average exchange rate for RMB since the start of Daily NK’s data series in late 2015 is 1228 won. The latest available observation gives 1241 won/RMB, and the RMB has appreciated against the won over the past few weeks. The Rimjingang data, here, too, gives a higher FX-rate for RMB than Daily NK, at 1250 won. Their index, too, shows the FX-rate for RMB going up over the past few weeks, but not to levels out of the ordinary. Still, if the won continues to depreciate against both the dollar and the RMB, it may be a sign of a more persistent foreign currency shortage.

Food prices

Rice prices remain as stabile as ever, in fact, even more so than this time last year. They continue to hoover between 4,500–5,000, with the latest observation being at 4,783.

Graph 3. Average rice price for three North Korean cities, spring of 2017–early 2019. Data source: Daily NK.

This should not necessarily be taken to mean that North Korea’s current food situation is not problematic. Even with increasing harvests in the past few years, it’s always been fragile. The past year’s drought reportedly took a toll on the harvest. Though market prices aren’t suggestive of any shortages as of yet, that could change in the months ahead. The latest harvest was likely lower than those of several previous years and difficulties in importing fertilizer may have contributed, but the dry weather was the main factor.

Even with a slightly lower harvest than in previous years, it seems that structural changes in agricultural management has improved agricultural productivity to such an extent that food safety isn’t severely threatened even with a reduced harvest.

Gasoline

Gas prices appear to have stabilized around a sanctions equilibrium, of sorts, since a few months back. The past year hasn’t seen any spikes near those of the winter in 2017, when prices went above 25,000 won per kg. For the past year, the price has mostly hovered between 13,000 and 15,000 won per kg. The last observation available from Daily NK, is at 15,200 won per kg. This is slightly higher than the average of the past 12-month period, 13,500 won per kg. A more recent report from Rimjingang puts prices at 13,750 won per kg, so perhaps prices have declined over the past few weeks.

What’s likely happened is that China has settled on a comfortable level of enforcement of the oil transfers cap, for now. (For a detailed look at fuel prices in North Korea and Chinese sanctions enforcement, see this special report.)

Graph 4. Average gasoline price, three North Korean cities, early 2018–winter 2019. Data source: Daily NK.

There is lots to be said about gas prices and their impact on the economy, but for now, it looks like supply of gasoline in North Korea is restricted, but stabile.

Hard currency reserves

I unfortunately don’t have any data to present on this issue, but it’s too important not to mention. We don’t know how large North Korea’s foreign currency reserves are, but all throughout “maximum pressure”, people have been speculating that they’ll soon run out. One South Korean lawmaker said in early 2018 that by October that year, North Korea would be out of hard currency. That clearly didn’t happen.

The lack of stabile foreign currency income may still be a problem for the regime, as mentioned above. It’s hard to imagine how it couldn’t be a huge headache. Look at the following graph for example, showing North Korea’s trade (im)balance with China, throughout 2017 and the first few months of 2018.

Graph 5. North Korea’s trade balance with China, in $1,000 terms. Data source: KITA.

Let’s assume that China is simply letting North Korea run a trade deficit, with only some vague future promise of payment in the form of cheap contracts for coal and minerals. Or, let’s say that China is even just sending North Korea a bunch of stuff without requiring any form of payment whatsoever. It seems highly unlikely to me that even a government like China would support the full extent of these imports. Even if North Korea is only paying in hard currency for a relatively small proportion of what it imports from China, that’s still a lot of money that’s just leaving the vaults, with virtually nothing coming in to replenish them. How long can this go on for? Probably longer than many estimated at the onset of “maximum pressure”, but certainly not forever.

Summary

In sum, judging by the numbers, North Korea’s domestic economic conditions appear stabile but quite difficult. No sense of widespread, general crisis is visible in the data. Nonetheless, the regime is likely under a great deal of stress concerning the economy. How much is hard to tell, but definitely enough for some form of sanctions relief and/or economic cooperation to be high on their agenda for Hanoi.

Share

Could Xi Jinping give Kim Jong-un fuel deliveries for his 35th birthday?

Wednesday, January 9th, 2019

By: Benjamin Katzeff Silberstein

At the present time of writing, Kim Jong-un is still in China, though some signs suggest his train may have taken off back to North Korea. Kim spent is 35th birthday in Beijing, and visited a high-tech factory zone and other sites relevant to his economic and industrial policy focus.

But what did Xi Jinping give Kim for his 35th birthday?

If the past is any indicator, Xi’s present may have been sanctions relief in the form of increased fuel deliveries. The data suggests that this is precisely what happened after Kim’s third visit to China last summer, on June 19th of 2018. Consider the following graph, from a forthcoming working paper:

Average gasoline and diesel prices on markets in three North Korean cities, January–August 2018. Data source: Daily NK price index. Graph: Benjamin Katzeff Silberstein/North Korean Economy Watch.

(If the image is too small, click it to see a larger size.)

Look closely at the dip in the blue line, in the right-hand side of the graph. This shows a significant drop — 50 percent! — in average gas prices on markets in three North Korean cities. This price drop came right at the time of Kim’s third visit.

Coincidence? Could be.

Market prices, however, tend to move for a reason, and there are no obvious factors that can explain this particular price drop. Other than Kim’s visit, that is. This is, of course, circumstantial speculation, but it makes a great deal of sense. China may have simply upped fuel deliveries to North Korea as a show of good faith prior to Kim’s visit, or after a direct request from Kim.

Should Kim have asked Xi for similar sanctions relief during this visit, it wouldn’t be all that surprising. It’s also worth noting that exchange rate for both US dollars and Chinese renminbi have gone up quite significantly on North Korea’s markets in the past few weeks, as I noted a couple of days ago, hinting that the economy may be under some distress. North Korea may not be under any general economic crisis as a result of the sanctions, but things surely aren’t looking great.

We should know when the next price update from Daily NK or other sources comes in, and just because Kim seems to have gotten sanctions relief at one point after a meeting with Xi doesn’t mean it’s a given for every single occasion. But it is reasonable to expect that Kim did get something from the trip. It did, after all, coincide with his birthday.

Share

Ri Yong Ho’s Vietnam visit and economic reform in North Korea

Wednesday, November 7th, 2018

By Benjamin Katzeff Silberstein

North Korea’s Ri Yong Ho is visiting Vietnam in November, several media outlets have reported. Reuters:

Ri will visit the Vietnamese capital, Hanoi, for three days from Nov. 27 to inspect industrial zones and interview economic experts, a diplomatic source with direct knowledge of the trip told Reuters.

[…]

U.S. officials have said Vietnam’s socialist market economy could be an example for North Korea.

Yonhap said Ri had told the Vietnamese government that North Korea hoped to learn from Vietnam’s model of development.

This week Kim hosted President Miguel Diaz-Canel of Cuba – another country under U.S. sanctions – during a lavish visit in Pyongyang, where the two leaders vowed to boost their cooperation.

Full article:
As North Korea ponders economic reform, its top diplomat to visit Vietnam
James Pearson and Hayoung Choi
Reuters
2018-11-7

We don’t know exactly where Ri will go or what the purpose is, but North Korean officials have often spoken of “learning” from other countries’ experiences, without any radical, systemic overhaul being announced. It isn’t doesn’t mean the regime plans to adopt any specific “model” wholesale, or to change the entire system of economic governance tomorrow. North Korea is a country, and like all other countries, there exists a local, national context to which all reforms and systemic changes will be adapted.

Share

Humanitarian aid, luxury goods and aid diversion in North Korea

Monday, October 29th, 2018

By Benjamin Katzeff Silberstein 

North Korea imported luxury goods from China for at least $640 million, says one South Korean lawmaker. Reuters:

“Kim has bought lavish items from China and other places like a seaplane for not only his own family, and also expensive musical instruments, high-quality TVs, sedans, liquor, watches and fur as gifts for the elites who prop up his regime,” opposition lawmaker Yoon Sang-hyun said in a statement.

“With the growing loophole, Kim would be able to near his goal of neutralizing sanctions soon without giving up the nuclear weapons.”

Last year, North Korea spent at least $640 million on luxury goods from China, according to Yoon.

China does not provide breakdowns of its customs figures. Yoon compiled data based on a list of banned items crafted by Seoul in line with a 2009 U.N. resolution.

Beijing’s customs agency did not immediately respond to a request for comment. Beijing has said it strictly abides by international sanctions against North Korea.

The 2017 luxury trade volume was down from the 2014 peak of $800 million, but was only a 3.8 percent drop from $666.4 million in 2016, according to Yoon.

The luxury items accounted for 17.8 percent of North Korea’s entire imports from China last year which totaled $3.7 billion, Yoon said.

Purchases of electronic products such as high-end TVs made up for more than half of the total transactions, worth $340 million, followed by cars with $204 million and liquors with $35 million.

China’s trade with North Korea from January to August this year tumbled 57.8 percent from the year-earlier figure to $1.51 billion, China’s customs agency said last month.

But Yoon’s analysis also shows North Korea funneled more than $4 billion into luxury shopping in China since Kim took power at the end of 2011.

Yoon accused China of loosening enforcement of sanctions, and criticized South Korea’s recent request for U.N. and U.S. exemptions to restart inter-Korean economic cooperation.

Full article:
North Korea bought at least $640 million in luxury goods from China in 2017, South Korea lawmaker says
Hyonhee Shin
Reuters
2018-10-22

Now, none of this means that Kim Jong-un is personally swimming in a sea of handbags and TV-sets in Pyongyang. Rather, it means that North Korea – whether semi-private companies or state entities – has imported a fair amount of so-called luxury goods, despite sanctions that should prevent such imports. The term “luxury goods”, moreover, is too broad in this case and encompasses several items that wouldn’t necessarily be classified as “luxurious” by most.

At the same time, UN institutions estimate that 1/4 of children in rural North Korea are underweight. As Chosun Ilbo reports:

The wealth gap between country and city is widening. One in every four rural children is undernourished and underweight and the North has the most serious poverty issue in East Asia, the FAO said.

The wealth gap between country and city is widening. One in every four rural children is undernourished and underweight and the North has the most serious poverty issue in East Asia, the FAO said.

The proportion of underweight children in rural areas is 27 percent but only 13 percent in the cities.

Full article:
1/4 of Rural Kids in N.Korea Underweight
Kim Myong-song
Chosun Ilbo
2018-10-18

The World Food Program (WFP), meanwhile, has only received 27 percent of their funding appeal for 2018:

According to Herve Verhoosel, a spokesperson for the World Food Programme (WFP), the UN agency is staring at a massive 73 per cent shortfall in funding for 2018, hurting critical programmes such as nutritional support for children.

“We must not wait for diplomatic progress to alleviate the suffering of millions of people – funds are urgently needed now,” said Mr. Verhoosel.

“Any donation we receive today will take at least six months to reach the people who need it, due to the time it takes to purchase and transport food.”

A lack of funding risks reversing small gains in nutrition for mothers and children, made over the past four years, on the back of concerted efforts by humanitarians. Limited funding has also resulted in the suspension of operations to build resilience among disaster-hit and vulnerable communities.

WFP needs $15.2 million over the next five months to avoid further cuts to programmes which help feed around 650,000 women and children each month.

Across the country, which is officially known as the Democratic People’s Republic of Korea (DPRK), more than 10 million people – almost 40 per cent of the population – are undernourished and in need of support, with one in five children stunted due to chronic malnutrition.

The country is also vulnerable to natural disasters, such as drought and flooding, which affect agricultural production and livelihoods.

Article source:
Critical food programmes in North Korea can’t wait for ‘diplomatic progress’, UN food agency warns
UN News
2018-10-09

So, what is really going on here? Is it accurate to say, like the headlines imply, that North Korea’s leadership is simply buying a bunch of luxury items for millions of dollars and letting children starve in the countryside? Is there a real risk that humanitarian aid can be diverted to the army, and what does this really mean? These are separate questions, but they are interrelated in the sense that they all touch upon Pyongyang’s incentives and policy choices when it comes to its humanitarian situation.

On 38 North, the host website of this blog, Kee Park and Eliana Kim show convincingly that the fear of diversion of aid to the military is exaggerated and unfounded:

International donors and organizations have become increasingly reluctant to provide funds to North Korea. Although five countries—Switzerland, Sweden, Canada, France and Russia—have responded to the UN’s request this year, there is still a funding gap of $88.1 million. Previous donors such as United Kingdom, Australia, Japan, Ireland, South Korea and others remain uncommitted. One concern frequently cited for this reluctance is that foreign aid, including critical humanitarian aid, will either be diverted to the military or fund the nuclear weapons and missile programs or take pressure off of the regime to provide for its people.

However, these concerns are based on basic misunderstandings of how and why humanitarian assistance is provided to North Korea. Facts on the ground show that the potential for diversion is minimal and the main benefactors are generally not government or military institutions. Given the mission of UN humanitarian assistance, denying the DPRK this assistance for political purposes is both unethical and inhumane.

Full article:
The Case for Funding the UN’s Request for Humanitarian Assistance to the DPRK
Kee B. Park and Eliana E. Kim
38 North
2018-10-23

One of their most central arguments is that opportunities for diversion are too small to be meaningful. Overhead costs only make up a small percentage of total costs, and little of it could even hypothetically be diverted given that it’s all needed to run UN operations in the country. When it comes to diversion of actual food aid, the authors argue that most diversion that may occur is done towards the markets – that is, the state doesn’t actually take foodstuffs for its own use, and resources that are used elsewhere do not necessarily benefit the North Korean government.

It also seems like diversion was much more of a real concern in the 1990s and early 2000s. The worry was primarily about diversion of food aid to the military and away from society’s most needy, and it wasn’t unfounded at all.  But we have to assume that there’s been a great deal of learning done by NGOs and international institutions present on the ground. They know what they’re doing.

Today,  food aid volumes aren’t large enough to be meaningful for the army to try to divert, it seems, even if they would want to. Much of the aid, moreover, consists not of rice and other goods consumed by the general public, but likely of nutritional assistance designed to maximize the caloric intake of vulnerable groups such as children and breastfeeding mothers. We also have to remember that the chain of aid distribution and reception is long and diverse. Park and Kim argue that Pyongyang has invested much more in recent years to meet humanitarian needs. I would add that people who have worked with humanitarian aid delivery on the ground have often commented on how local officials and staff members, regardless of what one might think of Pyongyang’s intentions, are often passionate and genuine in their will and hard work to ensure that food aid reaches their local constituents and intended recipients.

However, this angle misses an important point. Diversion isn’t just about the army grabbing bags of rice intended for malnourished children, it’s also, arguably, about resources in the bigger picture. At the end of the day,  for the North Korean regime, feeding the most vulnerable is a matter of priority. We know it could, should it choose to do so. Even in years when North Korean harvests have likely been lower than this year (which we don’t yet have figures for) given the upward  trend in harvests over the past few years, the deficit left between domestic production and projected need wouldn’t have been that expensive to make up for.

Enter the luxury goods. We don’t know what proportion of the $640 million represent purchases strictly made by the state, and not by individual North Koreans or private enterprises. (The lines in this realm are rarely clear-cut.) But even low-balling it and assuming that only 1/6 is bought by the government to supply Kim Jong-un’s court and patronage networks, that’s still more than what would have been required in food imports to meet the estimated needs of the population in 2012, when, again, production was probably even lower than it is today. The UN appeal of $111 million of this year is also roughly equivalent to 1/6 of North Korea’s estimated “luxury” goods import of the past year.

And that’s just using luxury goods as an illustrative example. We could also look at any one of the massive infrastructure investments by Kim Jong-un and the renovations and new constructions of entire city blocks and streets in Pyongyang, or loft projects such as the Masikryong Ski Resort. The point is that North Korea surely has the funds to cover the humanitarian needs of the most vulnerable among its population, but chooses not to and instead counts on the UN to foot the bill for doing so. A form of “diversion”, if you will.

This is not to argue either for or against giving humanitarian aid. That the regime makes certain policy choices seems a morally problematic argument for not funding humanitarian needs. But in the long run, especially as North Korea’s economic health improves, one has to wonder whether it’s sensible for the international community to keep paying for humanitarian needs in a country whose regime could afford to do so, but makes a different policy choice, year after year.

Share

National census underway in North Korea

Friday, July 27th, 2018

Benjamin Katzeff Silberstein

As is often the case, the census is fills important functions other than keeping track of demographics. And organs like the inminban, often associated with political surveillance and propaganda dispensation, are the foot soldiers of the effort. Daily NK:

It remains unclear whether it is being conducted for the United Nations Population Fund slated for October, in accordance with last year’s pilot survey.

“Rank-and-file inminban members (a type of neighborhood watch) have been conducting surveys targeted at residents, claiming that it’s just a periodic census. But people think it’s because a lot of people have disappeared,” a source in Kangwon Province told Daily NK on July 23.

A source in Ryanggang Province corroborated this news, adding that in her area the inminban are often accompanied by a Ministry of People’s Security (police) agent when interviewing families.

“For people who have traveled long distances, or with whereabouts unknown or reported as deceased, they’ll visit the household multiple times,” she said.

“When the family can’t give an answer as to why a family member has disappeared and suspect that the person has ‘crossed the river’ (either to defect, or to work in China with plans to return), they’ll follow up with the neighbors and ask what they know about the circumstances.”

Last year, North Korea requested that South Korea contribute 6 million USD to the United Nations Population Fund in June 2017 to help it conduct its first census since 2008. The South Korean government said at the time that it was “positively” considering such a contribution, but public confirmation has not since emerged.

A preliminary survey in North Korea began in October 2017 with technical support from the UN, with an official full-scale operation slated for October this year.

However, it is unclear whether the current surveys are directly connected with the official UN census project. As the source in Kangwon Province noted, “Natural disasters and other incidents have driven up the number of residents who have disappeared, so it may just be that the authorities want to ascertain their whereabouts.”

“When family members can’t provide an answer as to how or when a relative disappeared, the person in question is just listed as ‘missing,” she said, adding that “as there have been a lot of these cases in recent years, they’d surely want to resolve this in regards to resident registration records.”

The Ryanggang Province source agreed, stating, “There still hasn’t been a proper survey to document scores of deaths from various construction accidents and natural disasters, so they finally seem to be trying to ascertain what happened to those who have disappeared for one reason or another.”

A source in North Hamgyong Province opined that the upcoming divided family reunions could also be a factor in the recent census-like survey activity, with Pyongyang anticipating continued reunions in the future as inter-Korean relations continue to improve.

“Veterans of the [Korean] war are especially old, and until unification occurs defectors are also considered divided family members. The authorities would certainly see a need to investigate and classify these groups,” he said.

Article source:
Movement on national census potentially underway
Kang Mi-jin
Daily NK
2018-07-27

Share

Kim orders officials to study lessons from China

Monday, July 2nd, 2018

Benjamin Katzeff Silberstein

Daily NK reports on both lower fuel prices and a decree by the central authorities for provincial officials to study the lessons Kim learned from his most recent trip to China:

After returning from his visit to China (June 19-20), North Korean Chairman Kim Jong Un summoned all provincial managers in the country to the capital city of Pyongyang. Sources indicate he used the meeting to explain the current status and future direction of strategic relations with China and handed down new orders on agriculture.

“After the leader [Chairman Kim Jong Un] visited China, he called into Pyongyang every provincial Party chairman and People’s Committee chairman. It seems he instructed the central Party cadres to learn from the agricultural scientific achievements that he witnessed in China,” a source in Ryanggang Province told Daily NK on June 27.

“Residents are saying that the authorities are showing special interest in agriculture because it’s the most important sector right now. Residents are sharing the thought that if they can only solve the country’s food shortage problem, they will be able to live like other strong nations.”

“Seeing as he visited China three times within a short time frame,” he added, “it’s likely that he spoke about that as well. He probably talked about how China will be useful in the new era that will focus on economic development.”

On his trip to a Chinese agricultural science center, Chairman Kim learned about advanced cultivation methods, with North Korea’s Party-run Rodong Sinmun publication providing detailed reports to the North Korean population. This can be viewed as an acknowledgment of China’s scientific excellence, as well as an effort to promote the normalization of Sino-NK ties to the domestic audience.

Following Chairman Kim’s visits, rumors are circulating among residents that “aid from China” could be in the offing.

“After the Leader’s trip to China this time, the Chinese government said that it had shouldered the burden for international train costs from [the Chinese border city of] Dandong to Pyongyang. The cost of diesel and gasoline has been declining recently, so residents are wondering whether China has been helping out,” a source in North Pyongan Province said.

The cost of gasoline per kilogram is 9,500 KPW and the cost of diesel is 6,500 KPW in the border town of Sinuiju. Compared to the beginning of the month, these prices represent a reduction of 4,500 KPW per kilogram in the price of gasoline and 1,000 KPW in the price of diesel.

Responding to the falling price of oil, the transportation and distribution sectors are showing signs of increased activity, with “servicha [vehicles used by independent operators to move people and goods for a fee] and other vehicle owners like the donju [North Korea’s new rich class] enjoying the cheaper gas prices,” he added.

As North Korea continues its diplomatic blitz, meeting with the US, South Korea, and China, the expectations of residents are surging.

“Recently, [Kim Jong Un] signed the Panmunjom Declaration with South Korea, then went to China, then held talks with America, known to be the enemy. On the domestic stage, there have been some minor changes, but residents have high expectations. We are holding these high hopes because all of these countries – South Korea, China, and the US – have very strong economies,” the North Pyongan Province-based source explained.

“The younger generation is particularly eager that they might be able to learn about the latest technology and technical skills from South Korea, China, and America. After the summit with the US, market traders have high hopes that the sanctions measures might be reduced.”

Article source:
Kim returns from China with new instructions for local Party leaders
Kang Mi Jin
Daily NK
2018-07-02

Share

The calm throughout the storm: North Korean market prices in May 2018

Thursday, May 31st, 2018

By Benjamin Katzeff Silberstein

Daily NK just released their market price index for May 29th. With that, we get a pretty clear picture of the market situation for the full month of May.

So, what’s new? Not much, and that is newsworthy in its own right. Throughout the period of so-called “maximum pressure” in economic sanctions pushed by the Trump administration, North Korean market prices have, save for some months of a shaky diesel market, remained remarkably stabile. This trend continued in May.

Overall, average rice prices for May, in three North Korean cities, was 5041 won per kg. The average USD-exchange rate for the same period was 8061 won for $1. For a simple point of comparison, the average three-city rice price for late April 2017 was 4900 won/kg, and for USD, 8057 won/$1. For early June, rice cost 5228/kg, and for USD, 8026 won/$1. That prices are climbing is fully natural given that we’re approaching the so-called “lean season”, when North Korea is at the furthest point from the last harvest, and closest to the coming one.

How these relatively stabile prices are maintained is still very much a mystery. I maintain that if “maximum pressure” was truly all-encompassing, it would be very unlikely for at least foreign currency prices not to be impacted. The government may be keeping market prices stabile by adding to the supply of food and foreign exchange from their own coffers, and in the case of the foreign exchange rate, by contracting the supply of won by drawing down on credit supply to state enterprises, for example. But news of economic management at this scale would likely have been reported by at least one of the many outlets that regularly publish economic news from North Korea sourced from people inside the country. As things stand right now, there’s much we don’t know, but if the North Korean economy is truly in a crisis mode, market prices aren’t reflecting such a state of affairs.

Share

North Korean seafood continuously sold in China

Thursday, May 31st, 2018

Benjamin Katzeff Silberstein

Reports Daily NK:

There has been further confirmation that North Korean seafood products are being sold in China despite sanctions on the export of such items by the UN Security Council.
Large volumes of North Korean seafood products that were smuggled into the country as recently as last year are now being processed by China’s customs authorities, Daily NK sources say.
A photo of traders running to line up around trucks full of North Korean dried fish in Jilin, Húnchūn and Bàiquán Xiàn after inspections by the customs authorities appears to support these allegations.
In the image, the traders appear to be competing for a share of the North Korean dried fish, which has become difficult to purchase since international sanctions took effect.
“The tax authorities at Quanhe Customs seem to be allowing the passage of trucks full of dried fish from North Korea,” said a China-based source on May 29. “Because of that, we have started to see North Korean seafood products in the markets of Yánjí.”
The source added that the import of North Korean seafood products had been “totally prohibited following sanctions last year,” but that imports have “increased recently.” It is likely that smuggling has enabled the products to show up in China.
Daily NK sources suspect that China is “turning a blind eye” to the prohibitions on North Korean exports following recent summits between the Chinese and North Korean leaders.
“The Chinese prohibited the importation of fish, shellfish, dried squid and pollack up until last year,” said a separate source in China close to North Korean affairs.
“But after about a year they seem to be loosening the prohibitions.”
In August 2017, the UN Security Council adopted Resolution 2371, which includes seafood products in the list of banned North Korean export items. China announced a complete ban on the import of North Korean seafood products on August 15, 2017.
North Korean seafood products smuggled in via China ‘s customs authorities
Moon Dong Hui
Daily NK
2018-05-31
Share

The Koreas summit and the North Korean economy: why infrastructure is on the table

Sunday, April 29th, 2018

By Benjamin Katzeff 

It’s much to soon to expect concrete outcomes from all the summitry relating to the North Korean economy. Tentative signs suggest, however, that infrastructure will be on the table for the road ahead. A few of them:

  • Aside from a mention of promoting “balanced economic growth,” it’s really the only concrete measure within the economic sphere mention in the Panmunjom declaration: As a first step, the two sides agreed to adopt practical steps towards the connection and modernisation of the railways and roads on the eastern transportation corridor as well as between Seoul and Sinuiju for their utilisation. Sure, this is fairly vague too, but at least it’s something.
  • Kim mentioned infrastructure and railways during the summit, lamenting the comparatively poor state of North Korea’s transportation system:

During the talks, North Korea’s leader Kim Jong-un praised the quality of South Korea’s high-speed train system in Pyeongchang, while citing worries that if Moon were to visit the North, he would be inconvenienced since the transportation infrastructure there is much less advanced. “If (Moon) comes to the North after living in the South, it may be embarrassing. We will make preparations for a comfortable visit,” Kim said.

The South Korean president responded with hopes of restarting cooperation to build a railway connecting the South and North — which the two sides had agreed on during previous inter-Korean summits, yet never put to action.

“If the railroad is connected with the North, both the South and North can use high-speed trains. This is contained in the joint declarations of June 15 (2000), and Oct. 4 (2007), but it has not been executed over the past 10 years,” Moon said.

In other words, it’s already being talked about by the two leaders. It’s fairly uncontroversial and not politically touchy, at least not relatively speaking.

  • It’s not a coincidence that Putin mentioned infrastructure specifically during a phone call with Moon Jae-in about the summit. In theory, at least, it’s a potential win-win-win situation, both for North and South Korea and for other countries in the region, and therefore politically palatable. The idea of massive infrastructure projects as a way to facilitate trade, and peace, is certainly not new and has been part of the plan for inter-Korean economic exchange before, and the blueprints are too many to fully keep track of. Kim Jong-un will almost certainly be seeking support in this area, a crucial one for the second leg of Byungjin.

 

 

Share