UN WFP assistance to the DPRK falls in 2013

January 8th, 2014

According to Yonhap:

North Korea received record-low food aid from the United Nations food agency in 2013 due to sluggish contributions from the international community, a media report said Wednesday.

Some 38,000 tons of food were delivered from the World Food Program (WFP) to the impoverished communist country in 2013, some 30 percent of the agency’s target for the year, according to the Washington-based Radio Free Asia (RFA).

It was less than half the amount sent in the previous year and the smallest since 1996 when the agency began helping the North, the report said, adding it was attributable to the WFP’s failure to raise enough funds to achieve the goal.

The amount of the U.N. agency’s food aid to the North has been fluctuating from some 136,000 tons in 2008, 50,000 tons in 2010, 100,000 tons in 2011 and 84,000 tons in 2012, according to WFP data.

Citing its dark fund-raising prospects in 2014, the WFP told the RFA that most of its factories for producing nutrition biscuits for the people there were on the verge of shutting down in February.

The daily food rations for the people in the North came to some 400 grams per person last year, far lower than the minimum recommended amount of 600 grams and the North Korean regime’s target amount of 573 grams, the WFP said.

North Korea’s food production is estimated to have been at about 5.03 million metric tons in 2013, up 5 percent from the previous year, according to the WFP report posted on its website.

The food security situation, however, is still serious, with 84 percent of all households having borderline or poor food consumption, it added.

The North’s leader Kim Jong-un put an emphasis on food production in his New Year’s message last week, saying “all efforts should go for agriculture … in order to build a strong economy and to improve the people’s livelihoods.”

Here is the UNFAO November 2013 food security assessment.

Here is additional analysis from Benjamin Silberstein.

Here are previous posts on “Food“, “Agriculture“, “International Aid“, “International Aid Statistics“.

Read the full story here:
WFP’s food aid to N. Korea hits all-time low in 2013
Yonhap
2014-1-8

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North Korea’s ‘New Economic Management System’: Main Features and Problems

January 8th, 2014

Korea Focus
Park Hyeong-jung
Senior Research Fellow
Korea Institute for National Unification

Here is the summary/assessment:

The objective of the New Economic Management System in North Korea is the building of an “unplanned socialist economy,” or something similar to the “socialist commodity economy” China implemented between 1984 and 1992. Agricultural, industrial and financial measures that North Korea is trying to introduce along with the installation and expansion of special development zones under the New Economic Management System are mutually connected and therefore need to be simultaneously implemented.

North Korea has the conceptual blueprints for each economic measure and its leadership includes individuals who are interested in promoting the areas where they are specialized. However, the country apparently lacks the capabilities to create the proper economic and political conditions for these measures. Against this backdrop, production increase and overall economic growth cannot be expected and confusion would intensify.

North Korea had not made sufficient preparations economically and politically before the introduction of the New Economic Management System. Introduction of new measures inevitably affects the interests of those who had been active under the old system. Transitional imbalance may arise in the process of putting the new system into practice. Reserve resources are necessary to address such problems.

The sub-unit management system in the agricultural sector showed how the reform effort can be stymied. This new system spurs independent efforts of farmers and stimulates their motivation for production increase but it invited the resistance of agricultural bureaucrats. When the state and farmers begin to share products by a ratio of 7:3 instead of the previous ratio of 9:1, imbalance will emerge somewhere in the distribution of farm products. Reserve resources are necessary for such a sudden change. The same is expected of the industrial management system. Factory enterprises were given autonomous operation rights but the new system did not result in production increase. Reserve resources are needed here, too.

The new policy under the Kim Jong-un rule lacked consistency and often exposed zigzagging directions. Officials responsible for the implementation of the new policy were unable to win over dissenters and failed to secure reserve resources needed to overcome the material imbalance in the transition period.

Eventually, the management reform at factory enterprises and experiments with sub-units in farming areas were virtually abandoned. The sub-unit management failed because of resistance from agricultural bureaucrats, the authorities` unease about relaxation of peasant control and uncertainty about the food security for the privileged class. The sub-unit management system most seriously threatened the stockpiling of food grain for the military and the power elite. It is certain that the military was the biggest opponent to the new agricultural management system.

The New Economic Management System accompanied policies that reduced the privileged role of the military in the economy. Similar problems were certainly exposed in the reform of industrial and financial management, such as non-cooperation from the privileged group, concerns about loosening control of workers and managers, and lack of guarantees for special interests.

Yet, the sub-unit management in farms and increased autonomy of factory enterprises were not entirely meaningless. Interestingly, some in North Korea`s leadership believed that the sub-unit system with incentives to individual farmers was necessary despite many problems attached to the farmers` self-interests. Although it was not successfully implemented, it did help farmers gain more independence from state control.

The unavoidable trend of changes in the North calls for systemic reforms like the sub-unit management just as youths grow up to become adults and then to the middle age. The problem is how to operate the changed system to achieve production increase. To be successful, those in the North Korean leadership who advocate the New Economic Management System should be able to politically suppress those opposing it or win them over economically by assuring them of the distribution of surplus. What has happened to date shows that the new system has failed to make much progress in that direction.

Concerning the projects of building special economic development zones, similar problems have been detected. The Workers` Party Central Committee decided in a plenary meeting in March 2013 to take measures to diversify foreign trade, develop new tourist zones, and build special economic zones suitable for the specific conditions of each province. The Economic Zones Development Act was enacted in May and, as of October 2013, each province is boosting efforts to attract foreign investment and create new economic development zones.

The concept of special economic development zone can be defined as conforming to the “unplanned socialist economy” or the “socialist commodity economy.” But the success of special economic zones needs the three steps that were required to tackle the problems faced by the sub-unit farm management and the autonomous operations of factory enterprises as observed above.

MY NOTES:

This paper is the most comprehensive assessment of the origination and implementation of the DPRK’s “June 28” policies.

The author classifies the June 28 policies as an attempt to transform the DPRK from a system composed of KWP rule + decentralized reform + state ownership of production means to KWP rule + coexistence of market and planned economies + state ownership of production means. This state is called “socialist commodity economy” or “unplanned socialist economy”. The transition involves moving management to enterprises and farms where production is carried out on the basis of contract and state planning.

The plan was carried out by a group under the cabinet led by Ro Tu-chol.

ENTERPRISE SECTOR:
* No more production quotas/Enterprises make own plans and profit distribution
* Raw materials are traded firm to firm via “direct supply centers” (intended to provide nominal state oversight of firm-to-firm transactions)
* Enterprise officials appointed/fired by KWP
*30% profit tax

AGRICULTURE SECTOR
*70/30 split of output (previously state took fixed share regardless of output)
*Smaller collective farm sub ubits
*Smaller private plots and kitchen gardens.

FOOD MANAGEMENT:
*PDS do be abolished but increased control of markets
*Government employees (teachers/doctors) to buy food at “food supply centers” (where all food producers sell supplies).
*military personnel are to buy food at subsidized/fixed price
*”Independent accounting enterprises” (August 3rd?) employees are to be paid in cash and buy food. Enterprises still controlled by state to get rations.

Stephan Haggard wrote about the paper here and here.

All posts on the June 28 policy can be found here.

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North Korea’s evaluation of its 2013 economic policy

January 3rd, 2014

Institute for far Eastern Studies (IFES)
2014-1-3

North Korea concluded that despite international economic sanctions, its economic revitalization policy of 2013 was delivered as planned.

A report on the comprehensive evaluation of North Korean economy was featured in the Choson Sinbo, pro-North Korean newspaper based in Japan, on December 24. It pointed out that although DPRK-US relations worsened and resulted in tougher measures, “it provided the opportunity to mobilize the potential of the national economy.”

It reported that to be ready for a potential war, the farming process at cooperative farms was carried out early from the beginning of the year. In light industry and food industry, “stabilization of people’s lives” was championed as the main slogan in the drive to normalize raw material acquisition and production.

The news also reported, “factories, enterprises and cooperative farms are provided with conditions to conduct independent business activities,” and “economic management method was improved based on the principles that firmly adhere to the socialist economic system and the working mass as the owners of production activities to ensure the roles and responsibilities.”

In other words, the reinforcement of self-supporting system and introduction of a new method of operating a separate garden as a component of cooperative farms resulted in improved production and a 5 to 10 percent increase in the grain harvest per unit against the previous year.

In particular, the news emphasized that “this year is considered as the year of construction,” and boasted the construction of high-rise apartments and various cultural and sports facilities including horse riding tracks and water parks. Especially, Masikryong Ski Resort in Gangwon Province was announced to have gathered national and international attention.

Furthermore, the news recaptured the new policy of parallel “economic construction and nuclear arms development” announced in March 2013 and reported that “despite the hostile forces that concluded that the policy of parallel development was ‘infeasible’, the people are witnessing and feeling the changes taking place in the capital city through the new policy of parallel development that strengthened national defense with reduced cost to fully exert all efforts to rehabilitate the economy.”

In addition, the news also reported on the 13 economic development zones (EDZs) and analyzed that the EDZ policy “laid the foundation for foreign economic development that incorporated the changes in the international situation.”

Meanwhile, the Korean Central News Agency (KCNA) reported on December 28 that an enlarged meeting for the plenary of the Cabinet was recently opened to discuss the issues of resolving the food crisis through improved agricultural production and new agricultural sector tasks for 2014. This is rare for a Cabinet plenary meeting to be held exclusively to discuss the agricultural issue, as all economic issues are normally handles at this meeting.

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2013 DPRK defection numbers

January 2nd, 2014

UPDATE 1 (2014-1-13): Yonhap reports on the 2013 defection numbers:

The [Ministry of Unification], which handles inter-Korean affairs, said a total of 1,516 North Koreans settled in South Korea in 2013, up slightly from 2012 when 1,502 North Koreans arrived in the South, with women accounting for 76 percent of the total.

The ministry said South Korea is now home to 26,124 North Koreans.

And according to the Daily NK:

A total of 1516 North Koreans sought refuge in South Korea last year, bringing the total number of defectors living in the South to 26,124, 69% of whom are female.

ORIGINAL POST (2014-1-2): The Hankyoreh offers some decent data on DPRK defectors entering South Korea in 2013:

An estimated 1,500 North Korean refugees entered South Korea in 2013.

The estimate, which is roughly equivalent to the 2012 total, shows that the number has dwindled to less than 2,000 annually for the two years since Kim Jong-un took power in Pyongyang.

According to a Dec. 25 announcement by the Ministry of Unification, a total of 1,420 refugees had received protection authorization following government questioning as of November 2013. When the individuals currently undergoing questioning are factored in, the total number of refugees entering the country for the year is expected to be around 1,500 – roughly equivalent to the 1,502 refugees who came to South Korea in 2012.

The number would bring the total refugees arriving since the 1990s up to 26,100. The annual tally of refugees passed 2,000 for the first time in 2006. For five years, it remained in the 2,000 to 3,000 range, with 2,548 in 2007, 2,805 in 2008, 2,929 in 2009, 2,402 in 2010, and 2,706 in 2011.

But in 2012, the year the Kim Jong-un regime took over, the total fell to 1,500 a year, a drop of approximately 500 to 1,500.

Analysts said the decrease under the Kim regime was likely tied to stronger border defense aimed at securing the regime, along with more aggressive anti-defection policies, including actions to repatriate those who crossed the border.

Indeed, North Korea is known to have markedly stepped up its border defense since just after the 2011 death of Kim’s father and predecessor Kim Jong-il.

Another possible reason given for the drop was an improvement in food and economic conditions in North Korea in 2012 and 2013.

Meanwhile, North Korea continues to adopt a proactive policy of readmitting refugees who left for South Korea. In 2013 alone, thirteen defected opted to leave the South to return to the North.

While I am perfectly willing to admit that some DPRK defectors living in the ROK might have returned home, I believe it is not accurate to assert “thirteen defected opted to leave the South to return to the North” without mentioning that the DPRK has the ability to threaten family members who remained in the North to draw defectors back to the land of their birth.

Read the full story here:
Total number has dipped since Kim Jong-un took power due to tighter border control and N. Korea welcoming some refugees back
Hankyoreh
Kim Kyu-won
2014-1-2

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Kim Jong-un’s new year address (2014)

January 1st, 2014

A new year has begun, so most DPRK watchers are analyzing Kim Jong-un’s new year address (a return to a practice established by Kim Il-sung which was replaced by the “joint editorial” in the Kim Jong-il era). I have compiled most of the good analysis of the speech below.

First of all, you can watch the full speech here (in Korean):

You can read the full speech on KCNA here (English, Korean). For those of you who cannot access KCNA, click here to read a PDF of the speech in English and Korean.

Commentary:

38 North and here

New York Times

Washington Post

Institute for Far Eastern Studies

Yonhap and here

Choson Exchange

Stephan Haggard

Council on Foreign Relations

Nautilus Institute

Hankyoreh

New Focus International

Evans Revere

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2013 private ROK aid to the DPRK

December 30th, 2013

Yonhap announced that the ROK is allowing private aid groups to send goods to the DPRK. The article also mentions the total volume of the ROK’s official and private assistance to the DPRK in 2013.

According to the article:

South Korea endorsed private humanitarian aid to North Korea on Monday, an official said, in the latest assistance to Pyongyang despite lingering tensions on the Korean Peninsula.

The two private aid groups are allowed to ship nutritional and medical supplies worth 240 million won (US$227,000) to infants, children and people suffering tuberculosis in the North, unification ministry spokesman Kim Eyi-do told reporters.

The planned aid brought the total amount of assistance to the North by South Korea’s private aid groups to 6.8 billion won since February when President Park Geun-hye took office in Seoul.

South Korea has also shipped aid worth 13.5 billion won to the North through international organizations since February.

All posts on South Korean assistance to the DPRK in 2013 can be found here.

All posts on aid to the DPRK can be found here.

All posts on aid to the DPRK that have statistics can be found here.

Read the full story here:
S. Korea approves private humanitarian aid to N. Korea
Yonhap
2013-12-30

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Economic Cooperation Office for Overseas Koreans

December 29th, 2013

According to a recent article in Yonhap, the DPRK has established a new body to facilitate investments from overseas Koreans.

According to the article:

North Korea has established a government agency to facilitate investments in the communist nation by overseas Koreans, with its services to get into full swing by January, an official was quoted Sunday as saying.

Pyongyang established the “economic cooperation office for overseas Koreans” in August to provide support and guidance for investments from Koreans living overseas, the agency’s chief, Pak Kyong-jin, said in an interview with Minjoktongsin, a pro-North Korean website operated by a U.S.-based Korean.

The agency’s establishment is part of efforts to rebuild the economy, Pak said.

“An increasing number of overseas Koreans have been visiting the North to discuss investment issues. We have established the agency to handle these issues exclusively,” he was quoted as saying, adding that the agency will begin operation in earnest in January.

Pak said he would advise potential investors to focus on construction and light industries for the time being, rather than resources development projects that require massive amounts of capital.

I have been unable to locate any articles about this organization in KCNA or Naenara.

The DPRK also has the State Economic Development Commissio/Association for managing special economic zones/economic development zones (except for Hwanggumphyong, Rason, Kumgang, and Kaesong which have their own management committees), and the Joint Venture Investment Company for managing joint venture investments outside of the SEZs (presumably from non-Koreans). There is also a little known group called the Peach Economic Development Group which was recently announced. Their specific jurisdiction is unknown.

It is unclear what relationship (if any) this new organization has with these other offices.

You can read the full article here:
N. Korea establishes agency handling investments from overseas Koreans
Yonhap
2013-12-29

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DPRK grain production up in 2013

December 27th, 2013

According to Yonhap:

North Korea’s grain production is expected to rise slightly this year, a report said Friday, possibly higher than initially estimated.

According to the report from South Korea’s Rural Development Administration (RDA), the North’s overall grain production in the 2013-2014 harvest year is expected to reach 4.81 million tons, up 3 percent from 4.68 million tons tallied in the 2012-2013 period.

The rise comes partly from an increase in rice output, which is estimated to gain 2.9 percent on-year to 2.1 million tons.

The figure has a gap with an earlier estimate from the U.N. Food and Agriculture Organization (FAO), which forecast the communist state’s rice output to reach 1.7 million tons this year, slightly better than the annual average of 1.6 million tons.

“The weather in North Korea this year had been more favorable to the growth of crops (than last year) as the average temperature between May and September came to 19.9 degrees Celsius, 0.3 degrees higher than that of last year, while the country’s overall precipitation also rose 7.5 percent on-year to 1,001.5mm over the cited period,” the RDA said in its report.

The report said the North’s corn output was also expected to have gained 1.7 percent on-year to 1.76 million tons this year. The FAO earlier forecast the North’s corn output to reach 2.3 million tons.

North Korea suffers from chronic food shortages with the average amount of rice and corn consumed by the people said to be only half of the daily consumption recommended by the United Nations.

Read the previous post on the UN food assessment report here.

Read the full story here:
Report says N. Korea’s grain production likely to grow this year
Yonhap
2013-12-27

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DPRK consolidates gold export revenues

December 27th, 2013

According to the Daily NK:

Approximately two months prior to the purge of Jang Sung Taek, the North Korean authorities halted exports of gold ore from the mines of Hwanghae Province in the southwest of the country, Daily NK has learned.

The step allegedly followed the discovery of improprieties in the operation of mining enterprises managed by persons linked with Jang, and formed part of measures designed to bring foreign currency-earning activities en masse under strict Central Party control.

“The order to halt exports was handed down in October, some months before the official news of the purge of Jang Sung Taek,” a source involved in the industry told Daily NK on the 27th. “It was even applied to foreign currency-earners affiliated with Central Party organs, as well as those from normal provincial-level agencies.”

“A directive ordering operations to cease from the second half of the year was issued to Holdong and Eunpa mines in Yeonsan County, North Hwanghae Province. These mines are shut now and their shafts are just filling up with water,” the source went on. “Mine officials have told me that this order came down stating that neither provincial nor Central Party managed-enterprises were allowed to mine for gold.”

“By doing this just a few months before the Jang Song Taek purge, the authorities moved to integrate foreign currency-earning activities and confiscate those enterprises and funds formerly managed by Jang prior to his purging,” he added. Explicating his view of the logic behind the step, he went on, “[The authorities] wish to greatly reinforce their control over these foreign-currency earning enterprises’ resources so as to bring together the management of Kim Jong Eun’s ruling funds.”

“I am told that they discovered that the enterprises Jang was managing had not been passing their profits to the state in the prescribed manner, so they halted the trade completely” the source alleged. “They controlled the mines, saying that the reason was because Jang was flogging off natural resources for a low price.”

“Previously, only ore with a purity of 20-30g of gold per ton could be exported, so any ore with a lower purity than this was not controlled. But now they are stopping all gold ore from exiting,” he went on to explain, adding that the ban is causing serious problems for the region’s miners, many of whom rely in large part on income from the mines for their survival.

“They used to share export licenses with other enterprises and export ore that way, too, but right now that is also totally prohibited,” he added.

Read the full story here:
Gold Mining Stopped to Unify Funds
Daily NK
Oh Se Hyeok
2013-12-27

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Building the economy and construction projects emphasized once again

December 27th, 2013

Institute for Far Eastern Studies (IFES)
2013-12-27

In an effort to restore the mood of economic development following the ‘terror politics’ created from the execution of Jang Song Thaek, North Korean state media is beginning to emphasize “construction of a powerful economy” and “improvement of people’s lives” once again.

Rodong Shinmun reported on December 19, 2013 that all fields reached their production plans for the year, describing (on page 3) exemplary cases of various party organizations that upheld the legacies of Kim Jong Il and “displayed best practices that actively contributed to improving people’s lives.”

In one article (“Advancement in Science and Technology Is the Lifeline of Constructing a Powerful Economy and Improving People’s Lives”) the importance of science and technology was emphasized. It claimed, “breakthrough in science and technology is the best way to achieve a miracle and innovation in production while protecting the dignity of the nation in the era of knowledge economy.”

Korean Central Television, Korean Central Broadcasting, and Pyongyang Broadcasting encouraged its people to realize “new miracle, new record” in the production fields emphasizing the goals of the Kim Jong Un regime, “construction of economic powerhouse,” and “construction of civilized socialist nation.”

In addition, the military was presented with modern fishing boats. Kim Jong Un’s gift to the military may be interpreted as a display of interest in improving the welfare of soldiers. Kim Jong Un was reported to have made an on-site inspection at the “8.25 Fishery” military unit and expressed interest in the welfare of the soldiers.

Kim Jong Un is also continuing to commend “best citizens” as he delivered letters of appreciation to recognize those that displayed exceptional performance at the construction sites of Sepho Tableland and the residential complex for Kim Il Sung University (KISU) faculty members.

In the Kim Jong Un era, state media is continuing to emphasize the achievements in the construction sectors, calling these times a “new heyday of juche construction.” It listed last year’s construction achievements: completion of Changjon Street, People’s Theatre, Pyongyang Children’s Department Store, Rungra People’s Pleasure Park, People’s Outdoor Skating Rink, Pyongyang Folk Park, and Ryugyong Health Complex.

In addition, it boasted that Munsu Water Park was “miraculously” completed in only nine months. Other achievements were listed: War Memorial, Mirim Riding Club, Ryugyong Dental Hospital, Okryu Children’s Hospital, Unha Scientists Street, and KISU faculty apartment complex.

North Korea is propagating these achievements, heralding the Kim Jong Un era as the “glory days of construction” to promote his accomplishments and consolidate his power base.

During his own period of succession, Kim Jong Il sought the support of the masses by emphasizing construction of Changgwang and Munsu Streets and landmarks such as Juche Tower, Kaeson Mun (Gate of Triumphant Return), and Pyongyang Maternity Hospital.

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An affiliate of 38 North