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North Korea’s construction boom

Thursday, May 21st, 2009

Using Google Earth’s feature which allows users to view the same location at different points in time, we can see that Pyongyang has experienced quite a construction boom in the 21st century, particularly in the southern Rakrang District. Below I have posted some of the more interesting discoveries (dates are in the upper right corner of the images).

Tudan Duck Farm (Pyongyang)

Rakrang District

Tongil Market (Rakrang)

Russian Orthodox Church (Rakrang)

Kaesong Industrial Zone

Sinuiju market growth

Many have speculated that the construction boom is related to the DPRK’s plan to achieve a “strong and prosperous state” (Kangsong Taeguk) by 2012—the 100th birthday of the country’s eternal president, Kim il Sung.

UPDATE: Jon Herskovitz writes in Reuters that all this construction is actually making pepole worse off. According to the article:

The programme to forge a “great and prosperous nation” by 2012 was a central part of the mandate for Kim Jong-il, son of the founding president, when parliament extended his official leadership in March for five years.

The goals for the broken economy are lofty. The North wants to revamp its railways, coal mines, steelworks and electrical supply, end hunger and strengthen its already large military.

“The Korean people will strikingly demonstrate their heroic stamina as socialist workers … and thus fling open the gate to a thriving nation in 2012,” North Korean state media said in a report to mark May Day.

Foreign residents in Pyongyang say streets are being spruced up and buildings refurbished to mark the 100th birthday of Kim Il-sung, who died in 1994 but is still considered president for eternity of Asia’s only communist dynasty.

“The 2012 project fits into these themes: glorification of the past, and if past history is any guide, the wasting of huge sums on useless monumental edifices,” Marcus Noland, an expert on the North’s economy with the U.S.-based Peterson Institute for International Economics, wrote in an email.

“The problem for North Korea will be financing this initiative.”

North Korea’s centrally planned economy has shrunk significantly since the rise to power in 1994 of Kim Jong-il, whose government quickly stepped away from early attempts at economic reform which might have threatened its grip on power.

Money from overseas has been drying up as the prickly North has backed away from an international disarmament-for-aid deal and the impact of U.N. sanctions, tightened after its April 5 test launch of what many saw as a disguised long-range missile.

…

Those likely to bear the brunt of this shift in internal spending will be the most impoverished in the already destitute state, analysts said.

They will be forced to mobilise for government projects, leaving their local and mostly rural economies to stagnate, which means less food in a country that for years has been unable to produce enough grain to feed its 23 million people.

Read the full article here:
North Korea’s prosperity push could raise poverty
Reuters
Jon Herskovitz
5/12/2009

Posted in Construction, General markets (FMR: Farmers Market), Google Earth | 5 Comments »

DPRK government continues to prove price controls ineffective

Wednesday, May 13th, 2009

According to Radio Free Asia:

Government price controls are now being imposed on non-food items in the markets, with frequent spot checks by state security police to monitor sales of sought-after household goods such as spoons, toothbrushes, and candles.

Price tags for more than 35 items were posted at farmers’ markets in Hweryong , Onsung, and Moosan cities in northern Hamgyong province, where North Korea’s poorest people go to buy the hard-to-find necessities of life.

“Market administrators and security agents take turns asking repeatedly about the price of various items,” a North Korean who recently defected to the South said in an interview.

“According to the government-imposed price tags, a toothbrush costs 200 won, a spoon 150 won, and 10 candles 1,000 won.”

This compares with unregulated prices of 250 won for a toothbrush, 200 won for a spoon, and 1,300-1500 won for a bundle of 10 candles.

An average monthly salary for a worker in North Korea is about 2,500 won.

“If someone asks the price, the vendors will be sure to give you the price dictated by the authorities, but they will not actually sell anything for that price,” the defector said.

Another South Korean-based defector agreed.

“When the inspectors come by, they see the official price on the tag, but when buyers come by, the vendors never sell for that price, but for a higher one,” the defector said.

“If buyers ask the vendor to sell for the government-imposed price, the vendors simply tell them to try to purchase for that price from somebody else.”

To avoid the watchful eye of the authorities, some vendors simply avoid going to farmers’ markets, and instead set up small bazaars elsewhere to sell manufactured goods.

The North Korean government has attempted to regulate the markets in numerous ways in the last few years (More history and commentary here). So far the implementation of new rules has proven haphazard, unpredictable, and largely ineffective since the black market is well developed and the levels of bureaucracy involved in the operations are numerous and subject to local manipulation.

The non-uniformity of these market regulations can be seen in the following IFES report:

North Koreans subject to harsher market controls
Institute for Far Eastern Studies (IFES)
NK Brief No. 09-5-6-1
2009-05-06

Good Friends, a non-profit organization working for human rights in North Korea, reported recently that North Korean residents are becoming increasingly discontent due to the government’s strengthening of restrictions on markets.

The group’s online newsletter, “North Korea Today,” reported in its most recent issue (no. 275) that a new list of banned items, presented as the “February 17th policy”, was issued by authorities to women selling goods in the market in Chungjin, North Hamgyong Province on April 10th.

According to a Good Friends source, Party propaganda officials were dispatched to markets in broadcasting trucks in order to announce the new measure, blaring that the selling of goods on the list of banned items would be considered “anti-socialist” activity, and would be punished accordingly.

Other sources report that the ban has resulted in an increase of door-to-door sales, and that those in the market are still willing to take individual orders for goods on the banned list, and then meet outside of the market to complete the deal.

In Hyeryong, North Hamgyong Province and Hyesan, Ryanggang Province, the “February 17 policy” was posted around markets, but the details of the policy were not explained. In the city of Hamheung, market hours were also restricted, with sellers only allowed to operate from 1~6 pm.

The goods restricted were mostly imported wares, with as much as 90 percent of foreign goods banned, and absolutely all South Korean products blocked. Those caught selling restricted items can expect to have their goods confiscated, with additional punishment not unheard of.

So the good news is that these rules make little difference to the actual distribution of goods and services in the DPRK. Of course the bad news is that the North Korean government keeps trying.

The whole story can be obtained here:
Radio Free Asia
Jung Young
5/6/2009

Posted in Economic reform, General markets (FMR: Farmers Market), Price liberalization | Comments Closed

DPRK price data

Friday, May 8th, 2009

Chris Green of the Daily NK offers the following price data (click on image to see full size):

Source:
The Good, the Bad and the Optimistic
Daily NK
Chris Green
5/8/2009

Posted in Agriculture, Economic reform, Food, General markets (FMR: Farmers Market), Price liberalization | Comments Closed

DPRK market restrictions ineffective

Friday, April 3rd, 2009

Granted that information from the DPRK is nearly impossible to verify, it seems likely that the DPRK government continues to encounter difficulties implementing its most restrictive market regulations. They have tried repeatedly to impose rules which dictate who may work in the markets, how to allocate vending slots, what goods may be sold in the markets, what prices may be charged, and when markets may open.

With each new rule vendors and entrepreneurs respond by fighting back against the authorities (sometimes violently) or simply moving to the black market, which (as in other communist countries) composes a significant portion of the nation’s GDP.

The DPRK’s most recent market regulation (issued in the autumn of 2008) is the 10-day rule—prohibiting markets from opening except every tenth day. This rule was supposed to take effect in March 2009, yet it has not been successfully implemented—even in the areas where Pyongyang exercises the most control (large cities).

According to the Daily NK:

The North Korean authorities issued a decree in October, 2008 aimed at shifting the existing market system over to a 10-day market system and restricting the range of items being sold, but by mid-March of this year there was no market where the decree had been properly implemented.

Decrees attached to the entrances to markets were all removed and only the specific list of restricted goods is posted there. However, secondhand goods have been strictly regulated in some regions, so conflicts between citizens have arisen.

Each story about the failure of market restrictions stresses the inconsistency with which the rules are imposed across the country. In other words, local conditions predict the effectiveness of Pyongyang’s dictates. This is perhaps due to the DPRK’s market governance structure. Local markets are controlled by a local Market Management Office which is in turn subordinate to each City People’s Committee. According to the Worker’s Party organizational chart (view here), each City People’s Committee is subordinate to a Provincial People’s Committee (PPC), and all PPCs are subordinate to the Central Committee of the Workers Party.

This governance structure puts three layers of bureaucracy between the Central Committee and the actual markets, perhaps allowing local leaders to exercise significant discretion over market operations. True, random inspection units from the central authorities can make surprise visits, but their numbers are likely too small to enforce country-wide compliance, particularly when local officials can benefit from accomodating traders.

Still, these kinds of stories are both disconcerting and pleasing. Why disconcerting? Because the expectation by “Western” analysts (including myself) that market legitimization signaled a stable policy shift by Pyongyang has proven unjustified. The good news, however, is that the DPRK’s markets are proving surprisingly robust.

In 2003, North Korean authorities “legalized” markets throughout the country by converting previously existing “farmers’ markets” into “combined general markets” and allowing all traders sell their wares. After the legislation was passed, markets began to spring up in neighborhoods across the country–even in Pyongyang.

Although it is clear now that this was a politically defensive move on the part of the central government, North Koreans now reportedly spend more than 80 percent of their incomes in these markets. Despite authorities’ efforts to assert more control over the markets, they have (paradoxically) become the social safety net of socialist Korea.

Posted in Black markets, Economic reform, General markets (FMR: Farmers Market) | 1 Comment »

DPRK food prices stable

Monday, March 23rd, 2009

The Daily NK offers some recent food price data from the DPRK:

A defector named Kim, who keeps in touch with his family in the North, reported Monday in a telephone conversation with Daily NK, “The current food prices remain stable, according to sources from Hoiryeong and Pyongyang.”

Mr. Kim explained, “Rice sells in the Hoiryeong jangmadang at between 1,600 and 1,800won, around 200 won lower than before. Other grains and foods have fallen too. Pork sells for 2,800 to 3,000 won per kilogram and corn for 600 won per kilogram. An egg sells for 350 to 500.”

He added that, “Pork sold for about 5,000 won around lunar New Year’s Day and now it sells at half the price. Egg prices have risen a bit; they used to sell for 250 to 350 won. In Pyongyang, the price of rice, which was 2,200 won per kilogram in mid-January, is 1,700 won now. Corn per kilogram fell from 900 won to 750 won.”

He accounted for the lower food prices: In January, to greet the 60th anniversary of the friendship between North Korea and China, Chinese rice came in through Nampo port, so rice prices fell and provision of food increased. Since last year, the authorities have been able to deliver provisions to workers in a few major cities like Shinuiju.

He also relayed news that, “In February, a month’s provisions, 14 kilograms, were delivered to workers and their dependents; corn was provided through food distribution offices.”

Mr. Kim predicted that the situation will be at its worst in May and June of this year, although the food situation is comparatively much better than last year. No matter how good the last harvest was, though, it is not so significant for those who have to buy their food in the jangmadang.”

“Since 1995, food prices have always soared in May and June, the spring shortage season. After the spring this year they will soar again.”

In March or April, food in stock runs out and potatoes, barley, and other vegetables are not harvested until June. Therefore, rising food prices are a chronic spring phenomenon.

Pyongyang must feel reasonably confident, or they want us to think they feel reasonably confident, about current and anticipated food stocks. As reported last week, the DPRK has requested that all foreign NGOs and aid agencies responsible for distributing food aid to cease operations and head home.

Mr. Kim does offer some good news from North Korea’s markets (Jangmadang).

For some time we have heard news that the North Korean government is attempting to turn the clock back on local markets by regulating who may work in them (older women), when they may open, what they may sell, and at what price. All of these restrictions are supposedly part of a plan to break them down and reorient the population towards receiving goods from state-owned shops and the Public Distribution System. These measures could be part of the “2012 Kangsong Taeguk” plans, or they might simply be part of a longer-term political strategy.

It is rumored that these kinds of regulations have lead to violent backlashes because the socialist economy is not capable of supporting the population, and (paradoxically) markets are considered the social “safety net”. As a result, these market regulations are often ignored or “bypassed” by local officials and then quietly rescinded. Mr. Kim offers anecdotal evidence that regulation of the markets has still proven unsuccessful:

“Decrees to close the jangmadang were posted at the entrances but in January they were all removed and the jangmadang operated as usual.”

Let’s hope that this is the fate of more recent regulations as well.

Read more below:
Previous posts on food.

Previous posts on North Korea’s markets.

Food Prices in North Korean Markets Stabilize
Daily NK
Yoo Gwan Hee
3/23/2009

Posted in 2012 Strong and Prosperous Nation (Kangsong Taeguk), Agriculture, Food, General markets (FMR: Farmers Market), Price liberalization | Comments Closed

DPRK bans goods from markets

Sunday, March 22nd, 2009

Institute for Far Easter Studies (IFES)
NK Brief No. 09-3-20-1
2009-03-20

According to the North Korea Intellectuals Solidarity group, North Korean authorities released a list of goods banned from markets across the country on March 15. The ban goes into effect on April 1. The official list is said to include almost all wares currently being sold in the North’s markets, effectively banning market operations and practically outlawing private trade.

It was also reported that notices posted in the Hyesan and Wei Yan markets, in Yanggang Province, included not only a list of over 200 goods banned from sale, but also dictated the price at which allowable goods were to be sold.

Any goods from the United States or South Korea are specifically banned, as well as goods manufactured through inter-Korean projects such as joint ventures or from within the Kaesong Industrial Complex. Medicines and other supplies provided by the United Nations or other international organizations are also banned. Prices on foodstuffs were set, with Chinese millet to be sold at 1800 won, foxtail millet at 1700 won, and adzuki beans at 2100 won. Prices for privately harvested grains, eggs, tofu, poultry, pork, soybean oil, and other goods were also announced.

This measure appears to be in line with ongoing efforts underway since last year to close the North’s markets. While its effectiveness remains to be seen, if authorities succeed in shutting down markets, it could further exacerbate the North’s critical food shortages. In October of last year, North Korean authorities from regional commerce management offices throughout the country announced a ban on the sale of Chinese and South Korean goods, industrial products, and rice, corn and other grains, but this policy was never enforced.

Posted in Agriculture, Black markets, Economic reform, Food, General markets (FMR: Farmers Market), Institute for Far Eastern Studies | Comments Closed

North Korea Google Earth

Wednesday, March 11th, 2009

North Korea Uncovered v.16
Download it here

The most recent version of North Korea Uncovered (North Korea Google Earth) has been published. Since being launched, this project has been continuously expanded and to date has been downloaded over 32,000 times.

Pictured to the left is a statue of Laurent Kabila of the Democratic Republic of Congo. This statue, as well as many others identified in this version of the project, was built by the North Koreans. According to a visitor:

From the neck down, the Kabila monument looks strangely like Kim Jong Il: baggy uniform, creased pants, the raised arm, a little book in his left hand. From the neck up, the statue is the thick, grim bald mug of Laurent Kabila (his son Joseph is the current president). “The body was made in North Korea,” explains my driver Felix. In other words, the body is Kim Jong Il’s, but with a fat, scowling Kabila head simply welded on.

This is particularly interesting because there are no known pictures of a Kim Jong il statue. The only KJI statue that is reported to exist is in front of the National Security Agency in Pyongyang. If a Kim Jong il statue does in fact exist, it might look something like this.

Thanks again to the anonymous contributors, readers, and fans of this project for your helpful advice and location information. This project would not be successful without your contributions.

Version 16 contains the following additions: Rakwon Machine Complex, Sinuiju Cosmetics Factory, Manpo Restaurant, Worker’s Party No. 3 Building (including Central Committee and Guidance Dept.), Pukchang Aluminum Factory, Pusan-ri Aluminum Factory, Pukchung Machine Complex, Mirim Block Factory, Pyongyang General Textile Factory, Chonnae Cement Factory, Pyongsu Rx Joint Venture, Tongbong Cooperative Farm, Chusang Cooperative Farm, Hoeryong Essential Foodstuff Factory, Kim Ki-song Hoeryong First Middle School , Mirim War University, electricity grid expansion, Tonghae Satellite Launching Ground (TSLG)” is also known as the “Musudan-ri Launching Station,” rebuilt electricity grid, Kumchang-ri suspected underground nuclear site, Wangjaesan Grand Monument, Phothae Revolutionary Site, Naedong Revolutionary Site, Kunja Revolutionary Site, Junggang Revolutionary Site, Phophyong Revolutionary Site, Samdung Revolutionary Site, Phyongsan Granite Mine, Songjin Iron and Steel Complex (Kimchaek), Swedish, German and British embassy building, Taehongdan Potato Processing Factory, Pyongyang Muyseum of Film and Theatrical Arts, Overseas Monuments built by DPRK: Rice Museum (Muzium Padi) in Malaysia, Statue de Patrice Lumumba (Kinshasa, DR Congo), National Heroes Acre (Windhoek, Namibia), Derg Monument (Addis Ababa, Ethiopia), National Heroes Acre (Harare, Zimbabwe), New State House (Windhoek, Namibia), Three Dikgosi (Chiefs) Monument (Gaborone, Botswana), 1st of May Square Statue of Agostinho Neto (Luanda, Angola), Momunment Heroinas Angolas (Luanda, Angola), Monument to the Martyrs of Kifangondo Battle (Luanda, Angola), Place de l’étoile rouge, (Porto Novo, Benin), Statue of King Béhanzin (Abomey, Benin), Monument to the African Renaissance (Dakar, Senegal), Monument to Laurent Kabila [pictured above] (Kinshasa, DR Congo).

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No More Hoarding Grain

Thursday, February 26th, 2009

Daily NK
Jung Kwon Ho
2/26/2009

Hoarding grain, a major way for general farmers to substitute for the lack of public provisions, was barely possible during the latter-half of last year in Hwanghae Province, the breadbasket of North Korea, according to a source inside the country.

The source from South Hwanghae Province said, “It has become more difficult to hoard grains because the number of security guards on farms since late last year, and monthly house searches by the Province and counties, has made it much more difficult. The punishment for hoarding grain was strengthened; now hoarders are sent to long term reeducation camps.”

Hoarding grain has become a main tool for survival among general farmers since public provision has not been supplied consistently, if at all, in recent years.

Farmers steal grains right before harvest from the storage. From the perspective of the North Korean authorities it is stealing, but it is a lifeline for the people.

The average amount of hoarded grain was more than 20 kilograms in the past, but there were some households in Hwanghae Province that obtained one ton or more of grain. After that, the authorities’ countermoves became fiercer.

The source reported, “Now, farmers complain that it turns out that only guards can openly hoard grain.”

He explained that, “Farmers should receive a years wages according to their labor, but in reality the authorities exclude many parts of it for many reasons, so they can get merely 200,000 North Korean won, which is around three or four months living costs in North Korea.”

He added, “More than half the farmers eat porridge with floury corn and dried vegetables. In the situation where there are no provisions from the state, houses in which the whole family commits suicide can be found.”

Meanwhile, there is a rumor that 15-days’ rations will be distributed in regions of South Pyongan Province in February or March.

Posted in Agriculture, Food, General markets (FMR: Farmers Market), Public Distribiution System (PDS) | Comments Closed

Expansion of Pyongyang’s east market

Monday, February 23rd, 2009

The newest version of Google Earth allows the user to scroll backwards in time to see how a specific area has changed over the years. Although the satelite imagery available for North Korea needs to be expanded, by utilizing the current stock of photos we can uncover some interesting developments.

Below is an example—a bird’s eye view of the expansion of Pyongyang’s eastern market (click on images for full size):

December 25, 2003

June 4, 2004

April 6, 2005

October 29, 2005

Most recently

If any readers out there discover other interesting developments please let me know.

Posted in Construction, General markets (FMR: Farmers Market), Google Earth, Real estate | Comments Closed

Rice prices plummet in North Korea

Wednesday, February 18th, 2009

Institute for Far Esatern Studies (IFES)
NK Brief No. 09-2-18-1
2/18/2009

The online newsletter Open News for North Korea has recently reported that the cost of rice in the DPRK has fallen drastically. The report stated, “The price of rice in a number of cities, including Pyongyang, Nampo, Sinuiju, Hyesan, and Chungjin, has fallen an average of 300-400 won since the middle of last month,” but noted, “however, this is the nominal price, and considering that North Korea’s exchange rate has risen 10-20 percent compared to the Chinese Yuan, the actual fall in price is even greater.”

The price of one kilogram of rice in Pyongyang at the end of last month was 1700-1800 won (earlier prices were from 2000-2100 won); In Pyongsong and Soonchun, 1700won (2100 won), in Sinuiju, 1660 won (2000 won), in Hyesan, 1800 won (2500 won at the end of November), and Chungjin, 1800-1900 won (2000-2500 won at the beginning of January).

The newsletter attributed the drop in prices to the fact that rations from last year’s harvest were distributed to farmers on collective farms in January, and those farmers are now selling those rations in markets. The article explained that prices drop in January and February every year for the same reason.

In addition, North Korea reported that last year’s harvest was the largest in recent years, and that the North had imported large quantities of foodstuffs from China over the past several months. The newsletter stated that this, along with U.S. food aid shipped to Nampo, further added to the drop in prices.

“The North Korean Cabinet handed down an internal order to exchange foreign currency gained through exports until the end of December last year to import as much food as possible,” and the North imported 500 tons of Chinese rice through Sinuiju by January 9. Authorities insisted that after this first import, “[the North] will continue to exchange foreign currency for rice.”

These rice imports are being handled by mining and trade offices, including coal mining companies, the Central Party Underground Special Offices (Reungra Office 88, etc.), Kangsung Trade Office No. 54, which is controlled by the North’s military, Ryongaksan Trade Office, Eunpasan Trade Office.

North Korea is setting aside some imported rice as emergency stores, explaining that they are “in case South-North tensions escalate.”

Posted in Agriculture, Food, General markets (FMR: Farmers Market), Price liberalization, Public Distribiution System (PDS) | Comments Closed

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