Archive for February, 2010

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Money in Socialist Economies: The Case of North Korea

Sunday, February 28th, 2010

Ruediger Frank, “Money in Socialist Economies: The Case of North Korea,” The Asia Pacific Journal, 8-2-10, February 22, 2010.

Introduction
Dated January 29, 2010, the Foreign Trade Bank of the DPRK (North Korea) issued document No. DC033 10-004 to diplomatic missions and international organizations present in North Korea. They were informed that the use of foreign currency was to be stopped, payments were to be made in the form of non-cash cheques, and that the official exchange rate of the Euro to the North Korean Won was changed from 188.2 KPW to 140 KPW, effective January 2, 2010.

Foreign institutions and organizations now have to obtain non-cash cheques from the Foreign Trade Bank, denominated in KPW, in order to pay for accommodations, meals and service fees in hotels, fares for transport services like railways and airlines, communication charges, inspection fees, registration fees and commissions paid to institutions and enterprises in the DPRK, fuel, office materials, spare parts for vehicles, electricity, water, heating charges and rent. Bank transfers are now mandatory for any transfers between international organizations and all money paid to institutions and organizations of the DPRK (including the salary of DPRK citizens working in embassies or international organizations).

A recent visitor to Pyongyang confirmed in a talk with the author that individuals are subject to a cumbersome process if they wish to purchase anything. Rather than using a standard hard currency or exchanging it into the new Won, they now have to obtain a receipt stating the price of the good they want to buy, then present this at a desk where they exchange their money into exactly the needed amount of North Korean money, and finally return to the shop assistant, hand over the exact amount, and receive the product.

In the preceding weeks, North Korea had made international headlines related to what seems to be a concerted economic policy initiative. The domestic currency was reformed in a way that obviously aimed at reducing the amount of money in circulation (link). A few weeks later news emerged that the use of foreign currencies was banned (link).

This is no doubt a dramatic move with far-reaching consequences. Money matters for personal lives and for society, so when a country initiates a currency reform, it has significant repercussions.

But what are these consequences for the specific case of North Korea in early 2010? Are people in various sectors of society better off now, or worse? Will the economy benefit or suffer? Do the reforms promote or impede foreign trade and investment? Will the domestic political situation become more stable, or will it deteriorate? Are the economic reforms of 2002 reversed, or were they intended to be a temporary measure from the outset? Should we even interpret the currency reforms as part of the process of power succession?

(more…)

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Posted in 2002 Economic reforms, Banking, Economic reform, Finance, Fiscal & monetary policy, General markets (FMR: Farmers Market) | 1 Comment »

N.Korea still expects payment for summit

Friday, February 26th, 2010

Choson Ilbo
2/26/2010

North Korea is still demanding rice and fertilizer in return for an inter-Korean summit, even as it keeps sending increasingly urgent messages to Seoul to bring such a summit about.

Since a secret meeting between South Korean Labor Minister Yim Tae-hee and Kim Yang-gon, the director of the North Korean Workers’ Party’s United Front Department, in Singapore in October, “North Korea has kept asking us for a huge amount of economic aid in return for arranging a meeting” between President Lee Myung-bak and North Korean leader Kim Jong-il, a South Korean government source said on Thursday.

But the North seems to have no interest in giving in to South Korean demands to put denuclearization and the repatriation of prisoners of war and abduction victims on the summit agenda. “The North basically wants economic gain in return for letting us make political use of an inter-Korean summit for the upcoming local elections” on June 2, the source said. “It seems that the North still feels nostalgic for the Sunshine Policy,” which netted it huge benefits over the past decade.

The first inter-Korean summit in 2000 was announced only three days before the general election and was bought through a secret payment of billions of won. The second summit in 2007 was announced two months before the presidential election. Since 2000, the North has received more than 300,000 tons of rice and the same amount of fertilizer almost every year worth more than W1 trillion (US$1=W1,163) a year.

In another secret meeting between South Korea’s Unification Ministry and the North Korean Workers’ Party’s United Front Department in November, the North again insisted on specifying humanitarian aid in an agreement to be signed at an inter-Korean summit.

A “tree planting campaign for North Korea” initiated recently by the Presidential Committee on Social Cohesion also reportedly went awry because the North demanded a huge aid of food in return for letting South Korea plant trees there.

Kim Jong-il is apparently not aware that Seoul is serious about ending this cash-for-summits policy. A South Korean government official with experience in inter-Korean talks said, “At secret meetings, each side often had its own way of interpreting agendas. Maybe North Korean delegates who are accustomed to the Sunshine Policy are trying to interpret the current government’s messages the way they did with past governments.”

It seems the North has attempted to earn economic aid worth W1 trillion by prevaricating over the issue of the POWs and abduction victims, offering to handle it like part of reunions of separated families, and discussing the nuclear issue only with the U.S. 

Whether the attitude will change remains to be seen. The North is now in a worse economic situation than before in the wake of a recent disastrous currency reform on top of international sanctions and a severe food shortage.

Prof. Cho Young-ki of Korea University said, “The North is in dire need of support from the outside including South Korea to stabilize the regime for a smooth transition of power” to Kim’s son Jong-un. “It is possible that the North will reluctantly accept our request depending on progress in the six-party nuclear talks.”

The government believes that a dramatic turning point in inter-Korean relations could be reached if the North makes “big decisions” in the nuclear or POW issues, according to Kim Tae-hyo, the presidential secretary for foreign strategies.

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Posted in Agriculture statistics, Foreign aid statistics, Inter-Korean summit, International Aid, Political economy, South Korea, Statistics | Comments Closed

South Korea’s trade with the north falls into the red

Thursday, February 25th, 2010

Institute for Far Eastern Studies
NK Brief No. 10-2-25-1
2/25/2010

Inter-Korean trade, in which South Korea recorded surpluses throughout the Kim Dae Jung and Roh Moo Hyun administrations, has now fallen into the red under the current government.

According to customs statistics released on February 25, Seoul ran a trade deficit with North Korea under the Kim Young Sam administration until 1997, then was in the black through the Kim Dae Jung and Roh Moo Hyun administrations, almost until the end of 2007. Seoul has fallen back into the red, however, during the last two years of the current government. In other words, the People’s Government (under Kim Dae Jung) and the Participatory Government (under Roh Moo Hyun) exported more to the North than they imported, while this trend has now been reversed under Lee Myung-bak.

South Korea’s surplus in inter-Korean trade grew 11-fold from 37.9 million USD in 1998 to 417.7 million USD by 2005, then fell to 262.2 million USD in 2007. This trend occurred because exports grew at a much quicker rate than imports, from 128.9 million USD in 1998 to 1.0286 billion USD by 2007. However, as the current administration came into power, inter-Korean trade statistics dropped in to the red, with a 54 million USD deficit in 2008 and a 200.9 million USD deficit last year.

South Korean exports to the North grew considerably from the time of the People’s Government until 2008, but have fallen considerably over the past two years. In 2008, exports to North Korea amounted to 883.4 million USD, down 14.1 percent from the previous year. Last year, exports fell another 17.1 percent, to 732.6 million USD.

Last year, electrical products made up the majority of exports, at 24.8 percent (182 million USD). Following electrical products were short, synthetic ‘staple fiber’ (160 million USD) and cotton fabrics (67 million USD), followed by computers and other electronic devices (60 million USD).

On the other hand, clothing (390 million USD), fish (131 million USD), and electrical goods (122 million USD) were the top three imports. While South Korea is in the red, overall trade continues to grow, despite the international financial difficulties. This growth is driven largely by processing-on-commission manufacturing and products from the Kaesong Industrial Complex.

[NkeconWatch: I have a personal probelm with the way “the media” generally reports trade deficits as if they are somehow equivalent or comparable to budget deficits.  They are not.  Additionally, bilateral comparisons of trade deficits are silly. Bilateral comparisons are usually published by someone seeking to generate some kind of political response, but really they don’t tell you anything about what is going on in the economies of the countries involved.] 

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Posted in International trade, South Korea, Statistics, Trade Statistics | 2 Comments »

DPRK reopens markets, authorizes food sales

Thursday, February 25th, 2010

Institute for Far Eastern Studies
NK Brief No. 10-2-24-1
2/24/00

Suffering from severe food shortages, North Korean authorities ordered that markets be opened unconditionally, and that there be absolutely no crack-down on the sale of foodstuffs within the markets. This is according to a report issued on February 18 by the North Korean human rights organization ‘Good Friends’.

Good Friends’ newsletter revealed, “After examining a report on food shortages and the conditions of residents in each region throughout the country by the Office of Economic Policy Review, the Central Committee of the Korean Workers’ Party issued an ‘Order for Absolutely No Regulation Regarding Foodstuffs’ to each law enforcement office.” The order stated that until central distribution is running smoothly, all markets are to be reopened as they were prior to recent government crack-downs, and that under no circumstances were authorities to try to regulate food sales.

Furthermore, it reported that “the People’s Security Bureau also received the Central Committee’s order, and passed on a special instruction to each regional security office ordering agents not to crack down on markets for anything other than illegal goods, and not to regulate food sales, in particular.” Local authorities were also ordered not to engage in altercations with market traders and not to intervene or interfere in fights between traders working within the markets.

According to Good Friends, “Central Party authorities set the price of one kilogram of rice at 24~25 Won, corn at 9 Won/Kg, and corn noodles at 10 Won in an attempt to stabilize the daily lives of people, but the lack of central distribution made the attempt meaningless.”

A North Korean public health official relayed to Good Friends that a report released by central authorities on January 22 stated that there were more than 47 thousand cases of tuberculosis in the North, but that more than half were unable to receive treatment in a hospital, and that “the rise in the number of deaths due to starvation among the most indigent was due to TB patients being unable to eat and subsequently dying after catching a cold or the flu.”

In mid-January, Kim Jong Il called a meeting of Party administrative director (and brother-in-law) Jang Sung-taek and other high-level authorities in order to ease the side-effects of last year’s currency reform. A North Korean source relayed to Daily NK on February 17 that at the meeting, it had been decided that authorities would issue emergency rations to residents facing the threat of starvation.

According to this order, the Office of Food Procurement has been tasked with distribution of the emergency food; neighborhood units receive 5 kg of food daily, while offices receive between 5~15 kg, depending on the number of employees. Neighborhood unit directors or factory supervisors are responsible for assessing the food needs of their neighbors or employees, and prioritize food distribution to those households at risk of starvation.

Until the end of January, currency reform measures that banned the sale of food and drove prices up drove a significant number of households to starvation. However, since the emergency rations measure began to be enforced on February 1, there have been no reports of large-scale famine.

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Posted in Agriculture, Food, Forestry, General markets (FMR: Farmers Market), Good Friends | Comments Closed

The Moneytocracy of North Korean Higher Education

Thursday, February 25th, 2010

Daily NK
Yoo Gwan Hee
2/25/2010

Bribery, corruption and overweening power are ubiquitous in many areas of North Korean society, and today’s universities are no different. Instead of cultivating the ability of outstanding individuals, simple materialism rules supreme, teaching that money is the solution to every problem.

Like almost everyone in North Korea outside the elite, the lives of university students changed considerably in the days of the “March of Tribulation.”

Until the early 1990s, the idea of a capable applicant being unable to pursue post-secondary education due to financial difficulties was unheard of. In those days, the regime offered scholarships of 15 won (specialized departments 25 won) to university students. Since the currency swap in 1992, the size of scholarships increased to 50 won, and after the July 1st Economic Management Reform Measure in 2002, they increased again to 900 won.

But the range of recipients decreased markedly. After the ‘March of Tribulation’ in the mid-1990s, scholarships were only offered to those students in central universities like Kim Il Sung University. Students in regional universities had no chance of receiving fiscal assistance.

Before the “March of Tribulation,” students took North Korea’s university entrance exam and successful applicants were selected based on their grades, as they are in most developed, equitable countries. However, as the economic situation worsened in the mid-1990s, those with the money or “background” began to be selected at the expense of better, but poorer, applicants.

Then, after the year 2000, the amount of bribery required began to depend upon a student’s academic record. For example, those students with a much lower score compared to the pass mark who wish to attend average universities have to pay a bribe of $500~600. For leading universities like Kim Il Sung University or Pyongyang School of Commerce, students have to pay between $2000~3000.

Needless to say, students from poor families could not and cannot afford the degree of support required by universities, and so most have to stop their education.

Therefore, since the “March of Tribulation,” students from poor families have lost the chance to attend university. In comparison, students from rich and powerful families attend just so as to secure a cushy job later on, and their school lives are naturally very comfortable. Universities are solely oriented around those with money.

Of course, costs do not stop with admission bribes. In North Korean universities, a quarter of the calendar year is spent on mobilization for public works, marketed as obtaining real-life experience. In such cases, students are mobilized against their wishes. However, those from a wealthy family can avoid such activities by submitting goods or funding to their university.

Regarding spring work in the fields, for example, Mr. Kim (22), who attended Hamheung University of Mathematics until 2007, recently explained to The Daily NK, “Wealthy families submit the necessary funds or goods to the university every year to be exempted from mobilization. In the case of the 2007 farm village support battle, those students who submitted a carton of good quality cigarettes just rested at home.”

Some university students enroll in the military during their studies; however, those with money who wish to join the Party can just buy their way in, and also reduce the period of their military service, with a one million won bribe.

Also, during their university lives, students are duty-bound to take part in 6-months of Local Reserve Force activities. However, if a student offers up $300, he or she can simply rest without interference for the whole time.

That this materialism is even prevalent in public education causes the offspring of wealthy families to believe in the power of money and only money. Skill isn’t cultivated, it is bought, and needless to say the performance of North Korean universities is in a downward spiral as a result.

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Posted in Arduous March, Education | Comments Closed

N.Korea received 300,000 tons of food aid in 2009

Wednesday, February 24th, 2010

According to the Choson Ilbo:

North Korea is believed to have been given 300,000 tons of food either on credit or as aid last year, mostly from China, the Unification Ministry told the National Assembly’s Foreign Affairs, Trade and Unification Committee on Tuesday. That is enough to feed the entire population of North Korea for a month.

The UN Food and Agriculture Organization on Monday said North Korea faces a shortage of 1.25 million tons of food, but that did not take into account the amount provided by China and other countries. Unification Ministry Hyun In-taek said, “North Korea has been suffering from problems in food supply and distribution since its currency reform and has been taking measures to deal with the situation.”

Read the full article here:
N.Korea Took 300,000 Tons of Food Aid Last Year
Choson Ilbo
2/24/2010

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Posted in Agriculture statistics, China, Food, Foreign aid statistics, RoK Ministry of Unification, Statistics | Comments Closed

Chosen Soren schools face image problem

Wednesday, February 24th, 2010

According to Park Ju-Min writing in the Los Angeles Times:

The portraits of North Korean leader Kim Jong Il have been taken down from the classrooms in the run-down Tokyo Chosen No. 2 Elementary School.

But a quick look into the teachers lounge reveals the Dear Leader in all his glory.

The school for ethnic Koreans in Japan, one of about 60 in the country that are funded by North Korea, faces a delicate balancing act as money from the reclusive regime has decreased amid economic turmoil there.

Since the 1950s, the schools have been run by the General Assn. of Korean Residents in Japan, or Chosen Soren, whose Tokyo headquarters acts as North Korea’s unofficial embassy.

At Chosen No. 2, the eight teachers and 54 students face a life of political isolation as they try to preserve their ethnic identity in Japan, a country many people believe is in the sights of North Korea’s nuclear missiles.

Former Principal Song Hyon-jin knows the school spreads what many Japanese consider communist propaganda. Activists have surrounded the school with megaphones shouting for students and teachers to leave the country, threats that increased after North Korea tested a nuclear device last year. A student at another Chosen school was accosted on the subway, her traditional hanbok robe, worn by many North Koreans, ripped by her attacker.

“Even though the Korean community has changed much in the past 20 years, it’s still tough to live as a Korean in Japan,” said Song, a longtime Chosen member.

The schools get no funding from the Japanese government, which doesn’t officially recognize them.

….

Because there are no diplomatic ties between Tokyo and Pyongyang, the ethnic Koreans cannot apply for North Korean passports. They must be content to send their children to Chosen schools.

Since the 1970s, enrollment in the schools has fallen to less than 12,000 from 40,000, and fees have risen dramatically. In an effort to improve the schools’ image, administrators removed portraits of Kim Jong Il and his father, Kim Il Sung, from classrooms. They also added South Korean history to the curriculum, along with Japanese language and history.

Another change was softening the emphasis on North Korean propaganda, relying instead on a more straightforward history. To avoid undue attention, middle and high school students were ordered not to wear traditional Korean school uniforms after class.

“Schools have to be more open and acceptable for non-Chosen Soren affiliates for the sake of their existence,” said Han Young-hae, an associate professor at the Graduate School of International Studies at Seoul National University. “They need to reestablish their historical views and educational direction.”

As a result, the atmosphere here has lightened. South Korea also has begun taking up the financial slack, donating computers.

“I hope to teach here forever,” said Lee Young-sim, a 25-year-old art teacher who is a product of Chosen schools.

Song is heading a fundraising drive to build a new wing at the school, in hopes of stemming the defection of ethnic Koreans to Japanese schools.

“It is difficult to protect the school when many Korean kids are going to Japanese schools,” said Song, whose two children attend Chosen schools. “But I will do my best until the good day comes.”

Read the full article here:
North Korea-funded schools in Japan have an image problem
Los Angeles Times
Park Ju-Min
2/23/2010

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Posted in Chongryun, Education, Japan | 2 Comments »

’38 North’ featuring Bradley Babson

Tuesday, February 23rd, 2010

According to the email from SAIS:

Attached please find the latest bulletin from “38 NORTH,” a web-based initiative sponsored by the U.S.-Korea Institute at SAIS. The goal of “38 NORTH” is to harness the experience of long-time observers of North Korea and others who have dealt directly with Pyongyang in producing quality analysis of events north of the 38th parallel. This analysis, written by Bradley O. Babson, former World Bank official and Chair of USKI’s DPRK Economic Forum,  looks at recent developments inside North Korea from an economist’s perspective.
 
Too often, the media and the expert community jump to premature conclusions about what is going on inside North Korea. In the coming weeks and months, “38 NORTH” plans to publish a series of articles looking at these same developments in an effort to help us all get a better fix on the meaning of these events and their implications for the Korean peninsula, the region and the international community. These articles will be written by experts with different perspectives.
 
We are looking forward to the scheduled launch of the “38 NORTH” website on April 1, 2010. In the meantime, questions and comments regarding this publication should be directed to: [email protected].

Here is Babson’s article (PDF)

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Posted in John's Hopkins SAIS | 1 Comment »

DPRK weapons shipment seized

Tuesday, February 23rd, 2010

UPDATE 2: According to the Los Angeles Times:

In the report, obtained Thursday by The Associated Press, the South African government said the two containers are currently stored in a state-secured warehouse in Durban while its investigation continues. It estimated the value of the conventional arms at 6 million rand (about $770,000)

The shipment’s final destination, according to the bill of lading, was the port of Pointe Noire in the Republic of Congo, the small oil-rich country often overshadowed by its larger neighbor, Congo. The Republic of Congo, whose capital is Brazzaville, has reportedly experienced a wave of recent violence.
…
The report to the Security Council committee monitoring sanctions against North Korea is entitled “breach of the Security Council resolutions…”

It traced the shipment from the DGE Corporation via the “Machinery Expand Imp Corp (cq),” both established to be in North Korea, to the Chinese port of Dalian where it was put on board the CGM Musca on Oct. 20.

The bill of lading described the contents of the two containers as “spare parts of bulldozer,” according to the report.

At Port Klang, Malaysia, the shipment was transferred to another vessel, the Westerhever, which was chartered by Delmas Shipping, a subsidiary of the French shipping company, CMA-CGM, the report said. Delmas requested that CMA-CGM Shipping Agencies South Africa (Pty) Ltd. represent the Westerhever on its voyage to South Africa.

The captain was instructed to refuel in Durban on Nov. 28-29, but due to fuel shortages in Durban, the Westerhever was ordered to take on fuel in Walvis Bay, the report said.

While en route to Walvis Bay on Nov. 27, the captain “received an email instruction from Delmas to make a U-turn and discharge the two containers in Durban, the report said.

A U.N. diplomat familiar with the report, speaking on condition of anonymity because he was not authorized to speak publicly, said the email informed the captain that the ship was carrying suspicious cargo which should be turned over for inspection to South African authorities in Durban.

Martin Baxendale, a spokesman for CMA-CGM, said in Paris that the company was in contact with South African authorities but said “we cannot enter into discussions relating to any details in regard to this matter.”

According to the report, “a large quantity of rice grains in sacks lined the containers and was utilized as protective buffers for the conveyance of the conventional arms.”

UPDATE 1: According to the Wall Street Journal:

According a terse, two-page account delivered by the Pretoria government earlier this month to the U.N. committee overseeing the enforcement of U.N. Security Council sanctions imposed on North Korea, South African authorities in November seized two containers filled with tank parts and other military equipment from North Korea. The report said the containers, which were loaded on a ship in the Chinese port of Dalian and bound for the Republic of the Congo, contained gun sights, tracks and other spare parts for T-54 and T-55 tanks and other war material valued at an estimated $750,000.

The military equipment was concealed in containers lined with sacks of rice, said the confidential South African report, which was reviewed by The Wall Street Journal. Shipping documents identified the cargo as spare parts for a “bulldozer,” according to the report, which said the goods were shipped by a North Korean company.

ORIGINAL POST: According to Reuters (via Yahoo):

South Africa has told a U.N. Security Council committee it intercepted a North Korean weapons shipment bound for Central Africa, which diplomats said was a violation of a U.N. ban on arms sales by Pyongyang.

The seizure took place in November, when South African authorities received information that a ship headed for Congo Republic was carrying containers with suspicious cargo, according to a letter sent by South Africa to the Security Council’s North Korea sanctions committee.

Several Western diplomats described the incident as a “clear-cut violation” of Security Council resolution 1874, which bans all North Korean arms exports and most weapons-related imports in response to its nuclear program.

The letter, parts of which were seen by Reuters on Monday, said a North Korean company was the shipping agent and the cargo was first loaded onto a ship in China, then transferred to a vessel owned by French shipping firm CMA CGM in Malaysia.

Diplomats said the French company alerted authorities to the fact it had suspicious cargo on board and was not believed to have done anything wrong. The South Africans intercepted the vessel and seized the containers, which held tank parts.

The letter, which the committee received last week, said the South Africans discovered “that the contents fell within the definition of conventional arms in that the contents consisted of components of a military tank T-54/T-55.”

The letter said the documentation for the containers described the cargo as “spare parts of bulldozer.” T-54 and T-55 tanks were designed and produced in the Soviet Union in the 1940s and 1950s but were later upgraded and made in other countries.

Neither the French company nor the countries involved had any immediate comment.

Congo Republic, which borders Democratic Republic of Congo, has suffered a wave of violence in the Pool region between the capital Brazzaville and the oil port town of Pointe Noire that has broken a period of calm after a decade of instability.

COMMITTEE TO DECIDE
The diplomats said the committee was planning to send letters to countries involved in the case — such as North Korea, Republic of Congo, Malaysia and France — seeking more information so it can decide whether the North Koreans or any other nations were in breach of U.N. sanctions.

Resolution 1874, approved in June 2009, was passed in response to Pyongyang’s second nuclear test in May 2009 and expanded the punitive measures the Security Council had imposed on North Korea after its first atomic test in October 2006.

Last year’s resolution also authorized countries to inspect suspicious North Korean air, land and sea cargo and to seize any banned goods.

“The latest incident shows that the sanctions are working,” one Western diplomat told Reuters. “But it also shows that we have to be vigilant. The DPRK (North Korea) is still trying to violate the sanctions.”

Last week I mentioned that the UN Security Council was investigating four cases of alleged DPRK sanctions violations–but I only knew what three of the cases were:

Case 1: A North Korean shipment of chemical-safety suits that may have been destined for Syria’s military.

Case 2: Italy’s seizure of two luxury yachts allegedly bound for North Korea

Case 3: Thailand’s interdiction of North Korean arms aboard a plane allegedly bound for Iran

And now we know Case 4: Shipping of contraband to Central Africa.

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Posted in Arms shipment, Illicit activities, Manufacturing, Military, UN Security Council | 1 Comment »

DPRK government delivering rice to high risk areas

Tuesday, February 23rd, 2010

Daily NK
Jung Kwon Ho
2/22/2010

In late January, Kim Jong Il held a meeting of his highest officials, including Jang Sung Taek, Director of the Ministry of Administration of the Party, aiming to find ways to alleviate the negative side effects of November’s currency redenomination. In the meeting, the group apparently agreed to release emergency supplies of rice to those on the brink of starvation.

According to a Daily NK source, “Following the meeting, which he chaired, Kim Jong Il handed down a handwritten decree to the chief secretaries of all provinces on January 20 in which it was stated, ‘Preventing anyone from starving to death is your obligation.’”

Chief Secretaries of Provincial Committees of the Party, the recipients of the decree, handed on the threat to their subordinates, warning provincial cadres, “You will resign if anyone starves to death, because this was a direct instruction from the General.”

In the decree, the three most vulnerable provinces were named as Yangkang, South Hamkyung, and Kangwon Provinces, so the officials governing those provinces are understandably nervous. They are the provinces where most casualties occurred during the March of Tribulation, and they remain the most food insecure.

Under the decree, the Ministry of Procurement and Food Policy makes daily deliveries of 5kg of relief rice to each people’s unit and 5-15kg to each factory and enterprise. Chairpersons of people’s units and managers of factories are required to observe the circumstances of the people under their control and provide those in the greatest danger of starvation with relief rice first.

In late January, quite a number of households were reportedly facing starvation due to the aftermath of the currency redenomination; notably sky high prices coupled to strict market regulations. However, there have been no reports of starvation since relief rice deliveries began on February 1.

Alongside the chairpersons of People’s Units, cadres working for local government offices are required to cross-check whether or not starvation is occurring. In theory, they are reprimanded if they do not report the situation truthfully.

Upon hearing the news, a defector in Seoul commented, “It seems that the people will not lie still and suffer that dire situation. Kim Jong Il may have done this because he senses a crisis situation this time.”

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Posted in Agriculture, Agriculture statistics, Banking, Finance, Fiscal & monetary policy, Food, Ministry of Administration, Ministry of Procurement and Food Policy, Political economy | Comments Closed

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