World Food Program North Korea funds down

October 5th, 2015

By Benjamin Katzeff Silberstein 

Voice of America reports:

The U.N. food aid agency said Thursday that its aid to North Korea’s vulnerable people dropped 44 percent last month because of a lack of funds.

A World Food Program spokesman said the organization in September provided 2,105 tons of food to 742,000 people who depend on external assistance, including pregnant women and children.

Last month’s amount was also significantly less than what the U.N. agency planned to provide. The agency’s goal was to provide 10,000 tons of food to 1.8 million people every month.

Recently, the agency scaled down distribution areas to 69 counties and cities across the country.

“The main reason for distributing less food in September was insufficient funding resources,” wrote Damian Kean, WFP’s regional communications officer, in an email to VOA.

To fund projects this year, the agency needs about $167.8 million, but it has secured only half of the amount so far, according to the agency’s website.

The FAO has also highlighted the problem. As mentioned in another post, while the North Korean government claims success for agricultural reforms and claims that the drought impact was very limited, international aid agencies paint a different picture. But data confusion is nothing unusual for North Korea, and perhaps the picture will change as both the North Korean government and multilateral agencies continue to reassess the situation.

Read the full article:

Cash-strapped World Food Program Cuts Aid to N. Korea

Voice of America

10-01-2015

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North Korean state media still not pleased with forest restoration

September 29th, 2015

A new brief from IFES recaps the content of yet another North Korean TV broadcast detailing problems arising as the new forestry policies are being implemented:

On August 26, 2015, Korean Central Television (KCTV) aired a program entitled, Let’s Go Forward in Patriotism and Strength in the Forest Restoration Battle. The broadcast criticized several Forest Management Centers, including one in North Hwanghae Province’s Songnim. “They set up sun shades carelessly and then do not even water saplings properly. As a result saplings have become withered and yellow,” the program alleged.

The broadcast went on to a scathing critique of the tree nursery’s poor management: “The spraying equipment also does not properly work […] No more than 30% of the trees are alive […] The soil is overgrown with weeds […] One of the trees still has not sprouted.”

It also condemned the management of the Kangdong County tree nursery. “Because they do not properly conduct fertilizer management and also do not follow water guarantee measures, the saplings turn yellow and wither away. In the vegetable gardens there is so much seaweed that it is difficult to tell whether they are fields of saplings or meadows.”

“The fact that saplings can not grow properly is not due to unfavorable climate conditions but the defeatist and ‘non-owner’ work attitudes of the Forest Management Center workers and tree nursery work groups, who half-heartedly do their work and quit,” the broadcast added.

Read the full article:

IFES NK Brief

North Korean Broadcast Criticizes Forest Restoration Results

03-09-2015

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The Political Prestige of North Korea’s Economic Reforms, and why it may be a Problem

September 28th, 2015

By Benjamin Katzeff Silberstein

This certainly has been the season of contradictory information on North Korea’s food supply. The North Korean government is celebrating and claiming success of their agricultural reforms, while the FAO reports that things have gotten worse. Let us recap what has happened:

First there was the drought. North Korean state media described it as the worst one in 100 years. UN agencies predicted large-scale crop failures and appealed for food aid, warning that large shares of the population would be at great risk if aid did not come. The UN’s emergency response fund (CERF) allocated $6.3 million to counter the impacts of the drought. The rains came, however, and the drought alarms seemed to have been exaggerated.

Next, the North Korean media – assuming you can even talk about it as a single, coordinated entity – went the other direction. In July, the weekly Tongil Sinbo claimed that thanks to agricultural reforms, this year’s harvest had actually increased “despite adverse weather conditions”.

And recently, reports turned the other way again. In early September, the Food and Agriculture Organization of the UN declared that the cereal production forecast for the main season of 2015 had declined drastically from last year due to a “prolonged dry spell”.

The rain that eventually came in July and August, causing flooding in the northern parts of the country and leading to an estimated loss of one percent of all planted areas. The FAO rice production forecast for 2015 is 12 percent below that of last year. State food rations, the importance of which can be debated, declined drastically, according to the agency.

In the midst of all of this, North Korean propaganda is still claiming success for the reforms. Earlier this month, the state news agency KCNA reported that a “dance party” had been held in South Hwanghae, part of the country’s rice bowl, celebrating improving conditions on the countryside:

The performers presented cheerful dances depicting the happy agricultural workers who work and live in the rural areas now turning into a good place to work and live thanks to the successful embodiment of the socialist rural theses under the leadership of the Workers’ Party of Korea.

The picture gets even more complicated if one assigns meaning to the fact that cereal imports from China were reportedly lower in July this year compared to 2014. Figures from just one month might not indicate a trend, but given that July was a particularly dire month, these figures are still significant. If imports are being decreased because the official line is that agricultural conditions have improved, no matter the reality, that might be bad news for those in the North Korean public that rely on the public distribution system for any significant part of their consumption.

Either the FAO is right and the North Korean government wrong, or the other way around. Harvests this season cannot have been improving and getting worse at the same time. The FAO is probably far more likely than the North Korean government to have made a correct assessment here. Even if North Korean authorities aren’t claiming success of the reforms for propaganda reasons – which they may well be doing – it is hard to see why their statistical and monitoring capabilities would be better than those of the FAO.

So, the North Korean government is claiming that agricultural reforms are leading to better harvests and food conditions, even when they probably aren’t. Why would they do that? There are lots of possible reasons and one can only speculate.

One possible reason is that the agricultural reforms have become a prestige project. North Korean propaganda channels and news outlets have publically claimed that reforms are being implemented and leading to good results, even though some adjustment problems have been admitted. The same pattern, by the way, can be seen with regards to forestry policies – state media has publicized them with a bang and claimed that they just aren’t being implemented well enough by people on the ground when they don’t seem to be working as intended.

This could be an indication that agricultural reforms are indeed, like many have assumed, a major policy project of Kim Jong-un and the top strata.

That could be good news. After all, North Korea is in dire need of changes in agricultural structures, production methods, ownership and responsibility.

But it could also be bad news. When policies are strongly sanctioned and pushed by the top, their flexibility is likely to be inhibited. In other words, if the top leadership says that something should get done, it has to get done regardless of whether it works well or not.

Again, look at the forestry policies. According to reports from inside the country, those tasked with putting the new policies into practice on the ground say that doing what the central government asks isn’t smart or possible. Nevertheless, such orders are hard and risky to question.

At this stage it is only speculation, which is always a risky endeavor when it comes to North Korea. It may well later turn out to be wrong.

But if the state is placing enough prestige in the agricultural reforms to claim that conditions are improving even if they aren’t, that may lead to limited flexibility in how they are implemented and changed in the future. In other words, if the leadership thinks they are important enough to claim success even when things are getting worse, they may not be prone to changing their orders to fix what isn’t working.

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China – DPRK open new shipping route

September 25th, 2015

According to Xinhua:

A bulk cargo and container shipping route between China and the Democratic People’s Republic of Korea (DPRK) has been put into operation, focusing on coal import from DPRK and grocery export from China, authorities said on Friday.

The route, linking Longkou port of east China’s Shandong Peninsula to Nampo port of western DPRK was the first scheduled shipping line for bulk cargo and container between the two countries. It is serviced by seven ships, which complete one circuit of the ports every ten days, according to Longkou Port Group.

The route was jointly established by Longkou Port Group, Liaoning Hongxiang Industrial Group and a shipping company in DPRK in a bid to promote international trade under China’s “Belt and Road” initiative.

Located at the Bohai Sea coast and built in 1914, Longkou port handled 75.07 million tonnes of cargo and 550,000 TEU of containers last year.

“The opening of the route can help improve the service function of the port and is of great significance for the port’s transformation and upgrading,” said Zhang Haijun, general manager of Longkou Port Group.

Read the full story here:
Bulk cargo and container shipping route links China, DPRK
Xinhua
2015-9-25

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North Korean and Chinese scholars clashing over North Korean business laws

September 23rd, 2015

By Benjamin Katzeff Silberstein

Yonhap reports about a seemingly interesting forum that has taken place in Beijing, sourcing Global Times reporting. The article is an interesting illustration of the divergent ways in which Chinese and North Korean scholars/analysts seem to view North Korea’s economic situation and business environment (my emphasis):

Scholars from North Korea and China recently held a forum where they remain at odds over whether the isolated North could attract foreign investors and protect them, according to state-run Chinese media.

North Korean scholars insisted that their country offer a raft of legal and financial incentives for foreign investors, but Chinese scholars raised doubts over the North’s efforts, as it is under U.N. sanctions over its nuclear and missile programs.

The three-day forum, held in the Chinese border city of Yanji, ended on Sunday, state-run Global Times newspaper reported on Tuesday.

Paik Il-sung, a legal professor at North Korea’s Kim Il-sung University, said that the North’s laws protect the property rights of foreign investors. Even if the rights of foreign investors undermine North Korea’s national interests, an “unavoidable confiscation” of their property would be carried out in accordance to laws, Paik said.

Choe Su-gwang, an economics professor at the North Korean university, said that North Korea allows foreign investors to arbitrate conflicts with the state throughout an arbitration panel.

Besides geopolitical risks, poor infrastructure was cited by Chinese scholars as one of main reasons for deterring foreign investment in North Korea.

Lin Jinshu, a professor from China’s Yanbian University, said China intends to build infrastructure in the North’s Rason special economic zone, but a lack of relevant accords prevents Chinese investors from doing so.

Rason was designated by North Korea as a free trade zone in 1991, but efforts by the North to bring life to the zone have failed amid geopolitical concerns.

A monthly usage fee for the Internet in the Rason economic zone is 7,000 yuan (about US$1,089), but the Internet there is slow as a “turtle’s pace,” Lin told the forum.

Zhang Huizhi, a professor at China’s Jilin University, also raised the question how North Korea could protect property rights of foreign investors in the event of a war.

Aside from the comment about an arbitration panel, it is notable that the emphasis by the North Korean side of the discussion, at least as reported in this piece, lies very heavily on legal text. It’s enough if written laws are good, seems to be the attitude, which is of course not the way most potential investors see things.

Read the full article:

Yonhap News

N. Korean, Chinese scholars at odds over investment in N. Korea

09-23-2015

 

 

 

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North Korea’s domestic impacts of lower coal prices

September 22nd, 2015

By Benjamin Katzeff Silberstein

North Korea is seeing some interesting impacts domestically from the lowered coal exports. DailyNK reports that market trade has picked up in intensity as a result of the lower exports of coal:

Amidst the growing private economy in North Korea, a number of people are growing wealthy by cashing in on the expanding distribution industry. Recently, a growing number of these newly rich are purchasing China’s Jinbei brand of small 2-3 ton load trucks to facilitate business operations, Daily NK has learned.

“Recently, Jinbei trucks coming in from Dandong Customs House through to the Sinuiju customs office in North Korea are becoming very hot items in the transportation market,” a source in North Pyongan province reported to Daily NK on September 16th. “Foreign-currency earning enterprises are importing these smaller Jinbei trucks which are quite different from the 20-30 ton load trucks that were previously the norm.”

This information was cross-checked via an additional source in the same province and a source in South Pyongan Province.

As North Korean coal exports have decreased and domestic market activity has picked up, the small trucks have become more useful for delivering goods to local markets. “Ordinary men use bicycles or motorbikes to distribute goods, but the rich are able to buy these small 2-3 ton load trucks and use those instead,” he explained.

These trucks, as with most vehicles in North Korea, are first imported by foreign-currency earning enterprises and sold unofficially to individuals with the cash to pay up front and in full–i.e. the donju. Because possession of vehicles is still officially forbidden in North Korea, the car remains registered under the name of the affiliated enterprise’s name; the entrepreneurial individual utilizing it kicks back a portion of his–or, less frequently, her– profits to the company.

Read the full article:

DailyNK 

Jinbei trucks roll in, ‘donju’ distribution operations rise

2015-09-18

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New border bridge between North Korea and China: all is well in the border areas

September 15th, 2015

By Benjamin Katzeff Silberstein

Yonhap reports a new agreement between North Korea and China to build a bridge over the Tumen River, connecting Tumen City in China and Namyang in North Korea:

North Korea and China have signed an agreement to build a new bridge over the Tumen River that runs between the two nations, Chinese officials said on Wednesday, in the latest sign that economic ties between Pyongyang and Beijing remain largely unaffected despite the North’s nuclear and missile programs.

The agreement was signed in Pyongyang on Tuesday by North Korean Deputy Foreign Minister Pak Myong-guk and the Chinese Ambassador to North Korea, Li Jinjun, the Chinese Embassy said in a statement.

The new bridge will link the North Korean border city of Nanyang and the Chinese border city of Tumen, where bilateral trade with North Korea is bustling.

Financial terms of the deal were not disclosed.

During the signing ceremony, Li told Pak that the new bridge “will provide greater convenience for people of the two countries and trade ties” and “will also contribute to improving infrastructure of the China-North Korean border,” according to the statement.

Tumen is, of course, close to the larger city of Yanji (연길) and the two are well connected by highway.

It is perhaps symbolic of China-North Korea relations on the more local level that the announcement comes amidst news of increased signs of North Korean nuclear and rocket activity. Often, economic activity and ties between Chinese and North Korean border regions goes largely unaffected by regional political tension.

Read the full story:

Yonhap News

N. Korea, China sign deal to build new bridge over Tumen River

09/16/2015

Yonhap News

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Why won’t North Korean trees grow like Kim Jong-un told them to?

September 4th, 2015

By Benjamin Katzeff Silberstein

The forestry campaign that Kim Jong-un launched in a speech earlier this year continues. According to a new brief by IFES, North Korean state media has criticized certain nurseries for poor management.

North Korea has once again come out on broadcast television criticizing the poor management of tree nurseries at some of its Forest Management Centers. This public criticism of the forest restoration effort comes after the emergence of Kim Jong Un’s sister, Kim Yeo Jong, as an influential figure in the Department of Propaganda and Agitation.

On August 26, 2015, Korean Central Television (KCTV) aired a program entitled, Let’s Go Forward in Patriotism and Strength in the Forest Restoration Battle. The broadcast criticized several Forest Management Centers, including one in North Hwanghae Province’s Songnim. “They set up sun shades carelessly and then do not even water saplings properly. As a result saplings have become withered and yellow,” the program alleged.

The broadcast went on to a scathing critique of the tree nursery’s poor management: “The spraying equipment also does not properly work […] No more than 30% of the trees are alive […] The soil is overgrown with weeds […] One of the trees still has not sprouted.”

It also condemned the management of the Kangdong County tree nursery. “Because they do not properly conduct fertilizer management and also do not follow water guarantee measures, the saplings turn yellow and wither away. In the vegetable gardens there is so much seaweed that it is difficult to tell whether they are fields of saplings or meadows.”

“The fact that saplings can not grow properly is not due to unfavorable climate conditions but the defeatist and ‘non-owner’ work attitudes of the Forest Management Center workers and tree nursery work groups, who half-heartedly do their work and quit,” the broadcast added.

It went on to say, “When the workers use their heads creatively and engage in the work enterprisingly, great results are achieved in the expansion of the country’s permanent assets […] If all combatants in the forest restoration work sincerely, the Party’s forest restoration plans will be moved forward.”

One could of course argue that the issues described might result from the disconnect between political orders and constraints on the ground. For example, it has been reported that tree species that would suit local conditions in certain parts of the country would take at least three years to produce, but that the central government authorities want things to proceed immediately anyway. I am no forestry expert but it seems like a difficult task for even the most stern of political orders to make trees grow properly in the wrong conditions.

The full text of the IFES brief is available here:

North Korean Broadcast Criticizes Forest Restoration Results

The Institute for Far Eastern Studies at Kyungnam University

2015-09-03

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A new defector survey about market trade in North Korea, and what it says (maybe) about Kim Jong-un

August 28th, 2015

By Benjamin Katzeff Silberstein 

In Wall Street Journal, Jeyup Kwaak reports on a new defector survey by Seoul National University’s Institute for Peace and Unification Studies (08-26-2015) (added emphasis):

The Seoul National University Institute for Peace and Unification Studies annually surveys more than 100 North Koreans who defected in the prior calendar year. The results provide firsthand insight into developments in the isolated state, though its researchers said they shouldn’t be read as generalized facts due to the small pool of respondents.

[…]

The latest survey, of 146 North Koreans who escaped in 2014, shows significant growth from the previous year in the number of people saying they conducted private business activities and paid bribes to enable them. A little more than half said they received no money from the state, down from last year’s survey but up from the one released in 2013.

Experts say between half and three-quarters of North Koreans’ income comes from quasi-illegal market activities, such as trade of basic goods smuggled in from China, but sporadic crackdowns by national or regional security officials lead to irregular business and bribery. Defectors say officials often collect fees when they set up a booth at a market.

The results themselves do not present a new trend. Several previous defector studies indicate that markets are perhaps the most important source of income and sustenance for many (if not most) North Koreans. However, a few things are interesting to note.

The links may not be entirely clear, but it is at least symbolic that the current survey, albeit with a very small number of interviewees, suggests that support for Kim Jong-un and the leadership may not be waning, at the same time as market activity continues unabated. This at least calls into question an assumption that sometimes occurs that market trade would lead people to become more critical of the regime.

Again, too much shouldn’t be read too much into a small study with participants that probably are not geographically or socially representative of North Korea as a whole. Defectors as a group rarely are. But perhaps one could imagine that market trade being so institutionalized and regulated by the regime would make it more synonymous with the regime itself. I.e., if market trading is seen as something positive, maybe this reflects positively on the regime as well — perhaps the market has been co-opted.

The article also reminds us of the rather peculiar combination of dynamics seen under Kim Jong-un. On the one hand, market trade seems to continue unabated domestically, and initiatives like the new special economic zones and the agricultural reforms show that there is at the very minimum some new thinking going on.

But on the other hand, border controls have been tightened to a degree rarely seen since the mid-1990s, according to defector reports. Just today, DailyNK reports (in Korean) that resident in the Sino-Korean borderlands have seen their access to the Amnok river, often used for laundry by locals, increasingly restricted as of late. As the WSJ writes,

Just 614 North Koreans made it to the South in the first half of this year, compared with 2,706 in the 2011 calendar year, according to the most recent ministry data.

The drop in North Koreans who visited China on legal visas so far this year should perhaps also be seen in this context.

Taken together, the tightened border controls on the one hand, and the seemingly changing (one could say “progressive”) rhetoric on economic matters on the other, paint a mixed picture.

In the early days of Kim Jong-un, the question was whether he was a reformer or a hardliner. A few years into his rule, it seems he might be neither and both at the same time.

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How the North Korean media describes a market

August 25th, 2015

By Benjamin Katzeff Silberstein

A recent brief from IFES (08-07-2015) details how an article in the North Korean newspaper Tongil Ilbo describes sales at Kwangbok market in Pyongyang (emphasis added):

According to the Tongil Ilbo, there are now a number of local products sold at Pyongyang’s Kwangbok Area Supermarket, which was built in October 1991. “By achieving the informatization and computerization of all business activities, from warehousing to the sale of goods, the Kwangbok Area Supermarket guarantees accuracy and speed in its service. It is a commercial service center managed to guarantee the maximum convenience of its customers,” North Korea’s independent newspaper reported on July 11, 2015.

It explained that the Kwangbok Area Supermarket, which has a total floor area of 12,700 m2, sells household products, electronics, general textile products, and grocery products such as confectioneries on every floor. In addition, each North Korean brand is sold in the relevant department, including brands such as ‘Ryongmasan,’ ‘Kuryonggang,’ ‘Kumkop,’ ‘Hwawon,’ ‘Mirae,’ ‘Songchon,’ and ‘Bommaji.’

Located on the first floor, the grocery department displays local products produced by factories like the Pyongyang Flour Processing Factory, the Kumsong Food Factory, and the Kumkop General Foodstuff Factory for Sportspersons. “People like to purchase locally-produced products […] In the future public service networks like the Kwangbok Area Supermarket will emerge in other places as well,” the newspaper reported.

Kim Song Won, manager of the Kwangbok Area Supermarket, commented, “With the unprecedented growth of the country’s self-sustaining economic foundation, there is greater demand among the people for variety and quality in their products […] Accordingly, we are bringing in many domestic products and are working to provide services so that customers can purchase products that they like.”

Several things in this report are interesting to note. For example, while I am not sure that the market-oriented language is itself anything new in North Korean media lingo, the emphasis is striking. It is consumer preference that matters. Variety is considered important, not just the quality of the products. Again, Kim Il-sung too I believe talked about the importance of quality, but here it’s a matter of producing what people like, rather than what they need.

Read the full text:

IFES Kyungnam

Surge in Local Product Sales at Kwangbok Area Supermarket

08-07-2015

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