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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

Kim Jong il birthday gifts 2009

Wednesday, February 4th, 2009

UPDATE 2/20/2009): According to the Daily NK:

“Special holiday provisions,” which have long been provided to all the people of North Korea on the three major holidays, Lunar New Year’s Day, Kim Il Sung’s and Kim Jong Il’s birthdays, and provided a rare moment of modest luxury in the year, are becoming scarce and discriminatory in their application by the authorities.

A source from Yangkang Province reported in a telephone interview with Daily NK on the 17th, “There were no holiday provisions in Hyesan provided to the citizens.”

The source explained some of the causes, “In the past, the authorities prepared holiday provisions and handed them over in one lump to each city, county and province. But now, factories, working places or collective farms prepare provisions for associated workers and farmers by themselves. In this situation, cadres cast their obligation to prepare and distribute provisions onto lower managers and take their own portions first. Accordingly, many other citizens cannot have been given any provisions.”

The source from Yangkang Province continued that, “The holiday provisions had continued, even though they were nominal, until now. It was unimaginable that there could be no holiday provisions because even on October 10, 2005, the 60th anniversary of the founding of the Party, and on September 9 last year, on the 60th anniversary of the nation’s’ founding, there were special provisions of some sort.”

Historically, there have generally been three kinds of special provisions on national holidays. The first one is holiday gifts for children consisting of candies, cookies or school supplies; the second is more substantial foodstuffs like pork or liquor for everybody; and lastly the General’s special gifts for cadres and some workers or farmers who achieve impressive results.

“Get holiday provisions for yourselves!”

Until right before Kim Il Sung’s death, on the three holidays, these gifts and provisions could be taken for granted.

However, as the economic situation turned ugly, the special provisions from Pyongyang were all suspended. Since 1998, the holiday provisions have been given only to citizens of Pyongyang, aside from one kilogram of candies and cookies supplied to elementary school students.

Since 2000, the authorities have ordered other work places, factories and collective farms to provide holiday provisions by themselves from their own funds.

The order created side effects. Factories and other work places started mobilizing workers and residents to collect beans, medical herbs and bracken under the pretext of making foreign currency. They allotted certain duties to the People’s Units, factories and farms. For cadres, it appeared to be a significant business.

Regarding the Lunar New Year’s Holiday provisions for 2009, the North Korean authorities issued an instruction on December 20th entitled, “With respect to preparations for 2009 Lunar New Year’s Holiday provisions distinctively under the responsibility of the committee of each level of the Party.” It came from the Guidance Department of the Central Committee of the Party.

The source criticized that, “The cadres have used this occasion to generate benefits for themselves. Households where holiday provisions were given on Lunar New Year’s Day were just those of the “marvelous” cadres’ of the National Security Agency, the People’s Safety Agency, the Ministry of Foreign Trade and the Party.”

“On the 16th, local cadres of the Party were taken rice, pork, liquor, bean oil, and cigarettes as holiday provisions. Besides gifts to the Party in the provinces by each department, cadres of the Guidance Department under the Party in local provinces were given socks and cosmetic products produced in China,” the source reported.

He released rumors of this custom circulating among the people, “Some say that the Party in Poongseo, Yangkang Province exported 300 square meters of timber in early January [nominally in order to prepare for holiday provisions]. And, others say that deer and wild boar were offered to officials of local committees of the Party, the NSA and the PSA of the provinces.”

“When holidays come, only the people without power suffer to make foreign currency to guarantee cadres’ special provisions. Otherwise, they have to offer bribes in order to avoid doing such activities.”

Kim Jong Il’s special gifts flow into seats of power

A source from North Hamkyung Province revealed on the 17th, “For the February 16 holiday, the state supplied the authorities of Pyongyang, Hoiryeong, Samjiyeon and Kaesong Special District with provisions. In Hoiryeong, they received a bottle of bean oil, 500 grams of candies and cookies, soap, toothbrush and toothpaste.”

He additionally reported that, “In some regions of South Hwanghwa and North Pyongan Province, two or three-days of food were provided around February 16.”

The regions where the special provisions were supplied were all selected by the authorities; Hoiryeong, because it is the hometown of Kim Jong Il’s mother, Samjiyeon is the county where Kim Jong Il insists he was born, and Kaesong is a place opened to South Korea so it may have been for propaganda towards foreign visitors.

The source explained, “In 2006, in evaluation meetings for anti-socialism group inspections in Hoiryeong, chairpersons of the People’s Units brought to the attention of the inspectors the fact that many citizens had left their hometown, the Hometown of the Mother (Kim Jong Sook), for China due to the grim reality of their lives. After a petition was reported to the General, on every holiday special supplies have not failed there.”

However, he said, “Although technically I live within the Hoiryeong administrative district, those who live in rural districts, including me, were excluded from the special provisions.”

Meanwhile, Kim Jong Il’s gifts to the official class have not ceased.

“On the General’s birthday, Chief Sectaries of cities, counties and provinces of the Party and other high level cadres in local provinces receive the General’s gifts. Additionally, persons who provided distinguished service to the state or exemplary workers also got gifts, but in Hoiryeong merely seven workers and farmers received special gifts of any sort.”

He criticized, “In the past it was a pleasure that even liquor was provided equally to all the residents, but now it is in the past. Now, it is a happy day only for cadres.”

He expressed the atmosphere of the holiday, “Some singing performances were held to commemorate the birthday by the Union of Democratic Women and Socialist Working Youth League, but there were not many people in the audience. There were not many people on the streets. It was a depressing holiday.”

Regarding this mood, an NGO activist who works for defectors in China analyzed hopefully, “This trend does not imply systematic change in North Korean society. There is one significant point; that in national business regarding Kim’s birthday, centralized authoritarian rule and control are crumbling down.”

UPDATE (2/19/2009): According to the Daily NK:

In commemoration of Kim Jong Il’s birthday on February 16th, 15-days of rations were provided to the citizens of Hyangsan and Woonsan in North Pyongan Province.

According to a source, the ration consisted of 2 kilograms of rice, 2 kilograms of noodles and the rest in corn for households with more than four family members. For small households, a kilogram of rice and noodles were given and the rest in corn. Recently, on the farms, provisions have not been sufficient and stealing has grown difficult, so the expectation of our citizens regarding the special rations have been high.

The source explained, “Since last year, with the increase in the number of guards on farms and the strengthening of house searches, the stealing of food from farms has been absolutely impossible.” For the last several years, as rations failed even for farmers themselves, stealing from collective farms as a means of survival had become commonplace.

The source continued, “Inspections have also been taking place at the county and provincial levels every November and December. With the strengthening of the regulations governing grain, stealing has become more difficult. If one is caught, he or she is taken to a labor detention facility.”

All the citizens of North Korea usually receive some form of commemorative product in honor of Kim Jong Il’s birthday, though it is not always in the form of food.

ORIGINAL POST: Although the practice has become inconsistent since the “Arduous March” of the late 1990’s, each year the DPRK distributes gifts or special provisions in celebration the two leaders’ official birthdays (Kim il Sung: 4/15 & Kim Jong il: 2/16).

The value of one’s gift, however, allegedly depends on one’s rank in society. A common farmer might receive a new pair of socks. A senior Worker’s Party official probably receives a good deal more. The distribution of alcohol is popular. One estimate put the value of these special gifts at USD$20m.

This year, Yonhap informs us that children in Pyongyang will receive domestically manufactured peanut candies:

Choson Sinbo, a Korean language newspaper in Japan that usually echoes Pyongyang’s policy, said peanut candies will be added to the gift list for children this year, following the completion of a production line in Pyongyang Vegetable-Processing Factory.

The foodstuff factory that produces noodle, bread and sweets was newly equipped with a peanut candy production facility at the end of last year as “a governmental measure to enhance the people’s diet,” the report said.

It said all of the ingredients are provided by the government.

Lee Seung-yong, a coordinator of Good Friends, a Seoul-based aid group for North Korea, said the cash-strapped North often has to collect ingredients from its citizens to make the gifts for them.

Only 20 percent of North Korean factories are currently operating due to the lack of electricity and raw materials, according to the Korea Institute for National Unification, a state-run think tank in Seoul.

Though some gifts are manufactured domestically by the people, others are donated by foreigners. Expensive gifts are imported by the leadership.

Last year (February 2008), the Daily NK reported that locals actually resented receiving the gifts to some degree because all of the items were available in the marketplaces. Rather than restricting market activity and providing limited goods via the Public Distribution System (PDS), the story reports that people would prefer the government to simply make it easier to conduct business in the markets.

The DPRK has been placing a lot of focus on building/repairing “foodstuff factories” recently. Here is a link to KCNA stories about “foodstuff factories” via the very helpful Stalin Search Engine.

Read the more here:
N. Korean children to get peanut candies on leader’s birthday
Yonhap
2/3/2009

15-days of Food on the Leader’s Birthday
Daily NK
Jung Kwon Ho
2/19/2009

Un-Socialist Inequality
Daily NK
Lee Sung Jin
2/20/2009

Posted in Food, Light Industry, Manufacturing, Public Distribiution System (PDS) | 3 Comments »

Assessment of the 2008 DPRK economy, outlook for 2009

Monday, February 2nd, 2009

Institute for Far Eastern Studies (IFES)
ICNK Forum No. 09-2-2-1
2/2/2009

ASSESSMENT OF THE NORTH KOREAN ECONOMY FOR 2008

In the 2008 North Korean New Year’s Joint Editorial, Pyongyang established the year 2012 as “The Year of the Perfect Strong and Prosperous Nation,” while labeling 2008, “The Year of Turnabout,” and, “The Year of the Betterment of the Livelihoods of the People.” As the year marked the 60th anniversary of the establishment of the Democratic People’s Republic of Korea (DPRK), the regime projected a highly motivated façade, but there was no sign of new changes in the North’s economic policies.

Faced with the inability to produce any substantial results in the realm of international economic cooperation, North Korean authorities focused on how to put a positive spin on international conditions that were tied to the progress of 6-Party Talks. However, no visible measures appeared to emerge. Internally, North Korea’s chronic supply shortages drove further disparities between official and market pricing and monetary exchange rates as authorities were unable to stabilize the domestic economy. The growing global economic instability also caused economic policy makers to act more conservatively.

In 2008, North Korea’s food production in 2008 amounted to 4.31 million tons, recording a 7.5 percent increase over the previous year, while energy production is estimated to have grown by approximately 10 percent. Through joint development projects for North Korea’s underground resources, the North received raw materials for light industries (soap and shoes) amounting to 70 million USD in 2007, and 10 million last year. In addition, DPRK-PRC trade and inter-Korean economic cooperation both grew (DPRK-PRC trade increased significantly, while North-South cooperation grew only slightly), but it is difficult to measure the extent to which these increases impacted the North’s economy.

It appears that overall, North Korean trade and industry has improved since 2007, and the 2008 economic growth rate was positive. However, when estimating the North’s economic growth rate in light of the quickly rising exchange rate for South Korean won, DPRK economic growth for 2008 could be seen as a negative value.

While North Korea’s overall industrial production grew in 2008, when compared to previous years, and the primary reason for such was the refurbishment of equipment in most stable industries, development assistance and heavy oil aid as part of the 6-Party Talks, the provision of raw materials for light industries by South Korea, and the rise in prices on goods internationally.

Because of favorable weather conditions and increased production of fertilizer in the North, the agricultural sector showed a relative increase in production in 2008, despite the suspension of fertilizer aid from South Korea. Grain production was up 300 thousand tons, for an estimated total of 4.31 million tons last year. Boosted energy production was helped by improvements in hydroelectrical production and heavy oil tied to 6-Party Talks, and the provision of parts and materials for power plants, which considerably increased power production, at least in the first half of the year. This played an important role in the increase in industrial operations, as well. As electrical supply is the biggest obstacle to raising the operating rate of production facilities, more power resulted in overall production increases.

The construction sector has focused efforts on Pyongyang, and in particular on efforts to improve the lifestyles of its residents. Housing (averaging 20,000 family dwellings per year), restaurants, waterworks, roads, and other construction and repair projects have been aggressively undertaken.

North Korean authorities emphasized the science and technology sector in 2008, although it appears that the actual impact of this campaign topped out at the supply of some practical technology and the at production facilities, power plants, and other factories, and the promotion of modernization and normalization of industrial production.

At the mid-point of 2008, inter-Korean trade had grown by 1.2 percent compared to the same period the year prior, reaching 1.82 billion USD. The freeze on the annual supply of 400 thousand tons of rice and between 300~350 thousand tons of fertilizer from the South had a negative impact on the North’s food situation. On the other hand, DPRK-PRC trade from January-November 2008 jumped by 29.3 percent over the same period in 2007, considerably more than the 14.9 percent recorded in 2005, the 14.9 percent seen in 2006 and the 16.1 percent rise last year.

The increase natural resource development and improvements in core industries, the possibility of expansion of markets, and the advantage of low-cost labor give China, Russia, and other adjacent countries positive perceptions regarding investment in the North, and as Pyongyang continued to expand economic cooperation with these countries last year, it also improved economic relations with Europe as well as Egypt and other Middle Eastern countries.

PROSPECTS FOR THE NORTH KOREAN ECONOMY IN 2009

If one looks at North Korea’s domestic economic policies, one will see that basically, in the 2009 New Year’s Joint Editorial, North Korea’s domestic and international economic policies have not undergone any significant changes. However, in order to accomplish the goal of establishing a Strong and Prosperous Country by 2012, it is expected that all efforts will be poured into reviving the economy. Based on the Joint Editorial, this year, the North’s economic policy is not one of reform due to transformation of the outside environment, but rather a revival of pas, conservatively grounded economic policy. Regarding international economic relations, the 2008 Joint Editorial specifically stressed the building of an economically strong nation based on the principle of the development of external economic relations, but there was no particular reference to this in 2009.

In 2009, resolution of agricultural problems was again prioritized as the task most necessary for the realization of a Strong and Prosperous Nation by 2012. Along with this, the North’s economic policy for 2009 will prioritize the modernization and normalization of the economy’s ‘vanguard sector’, and it is expected to continue to strengthen efforts to revive the economy. As it continues to work toward creating an environment in which it can concentrate efforts on the building of an ‘Economically Strong Nation’, North Korean authorities are expected to issue new measures to strengthen the economic management system, including the planned industrial system, the distribution and circulation framework, and an effective market management system. The North is also expected to further emphasize efforts to modernize the People’s Economy, as it considers modern vanguard science and technology to be the answer to recovery from its current economic crisis.

There is a possibility North Korea’s foreign trade, including that with China, will shrink in the future, as its external economic activity is hit by the current international economic situation and the rising value of the U.S. dollar and Chinese Yuan. Just as was seen in 2008, with the shrinking growth of the Chinese economy, DPRK-PRC trade will be hit negatively. Progress on the rail link being promoted between Rajin and Hasan, as well as the redevelopment of the Rajin Harbor is also expected to face difficulties. This is likely to lead to further efforts by the North to expand economic cooperation with the EU and Middle Eastern countries.

Despite North Korea’s removal from the U.S. list of terrorism-sponsoring states, because sanctions against North Korea still remain, the North will need to make progress in non-proliferation, human rights improvement, and marketization in order to see real economic benefits from improved relations with the Obama administration. However, because of a lack of confidence regarding market reform, differing stances between the U.S. and DPRK on denuclearization, and deeply rooted mistrust, there is a more than a small chance that progress on the nuclear issue will be stretched out over the long term.

Looking at prospects for the main domestic economic sectors of North Korea, firstly, the amount of development in the energy and mining sectors could take a favorable turn if there is movement on the nuclear issue, and this would have an overall positive effect on the entire industrial sector. The drop-off of demand due to the international financial crisis could have a considerable impact on the North’s mining sector, making it difficult to see much growth past the levels seen in 2008.

In 2009, the supply-demand situation regarding North Korean grains is expected to improve over last year. North Korea requires 5.2 million tons of grain, and is expected to harvest 4.9~5 million tons, falling only 200~300 thousand tons short. This is an improvement over the 790 thousand ton shortfall the North suffered in 2008. However, the actual amount of grains distributed to the people may not increase, because some of the 2008 shortage was relieved through the release of emergency rice reserves, and so some portion of the 2009 harvest will need to be set aside to restock that emergency reserve.

In the manufacturing sector, the increase in electrical production and increase in large-scale equipment operations in metalworks, chemicals, construction materials, and other heavy industries, the supply of materials for light industries as well as fertilizer will be extended, but the reduction of inter-Korean economic cooperation and foreign capital will mean a reduction in the ability to import equipment and materials, making it difficult to meet 2008-level growth in industrial production numbers.

In the construction sector, housing construction in Pyongyang and other areas will not fall off suddenly, but with the anniversary of the founding of the Party Museum upcoming and the impact of the furious construction activity that has been underway, it is likely to slow down in 2009. With North Korean authorities restricting private-sector economic activity, controlling the size of markets, and other measures controlling commerce in the North are expected to strengthen, which will considerably restrict anti-socialist commercial activity. To what extent official commerce networks will absorb this activity will be pivotal.

Trade between North Korea and China is expected to shrink as the global economic crisis drives down the price of raw materials that the North exports to the PRC. Following the North Korean authorities’ enforcement of a measure reducing inter-Korean economic cooperation on December 1, 2008, without improvement in the North Korean nuclear issue, and in U.S.-DPRK relations cooperation between Seoul and Pyongyang will gradually shrivel. Trade with other countries is also expected to fall as a result of the current global economic situation. Therefore, reduction of inter-Korean economic cooperation, North Korea’s principle provider of foreign capital, and sluggish trade between Beijing and Pyongyang will weaken the North’s foreign reserves supply-and-demand situation.

As for the investment sector, if North Korea is to succeed in its push to build a Strong and Prosperous Nation by 2012, it must attract foreign investment through aggressive policies of opening its economy. In order to improve the investment environment, Pyongyang must work more aggressively to resolve the North Korean nuclear issue, but despite the demands of the surrounding countries, it is likely North Korea will insist on recognition as a nuclear power, making it difficult to expect progress on this front. Therefore, foreign investors’ interest in North Korean markets, and North Korea’s assention into international financial institutions through improved relations with the United States, appears to be a long way off.

Posted in 2012 Strong and Prosperous Nation (Kangsong Taeguk), Agriculture, Agriculture statistics, Construction, Food, Foreign aid statistics, GDP statistics, General markets (FMR: Farmers Market), Kim's New Year Address (Joint editorials), Light Industry, Manufacturing, Statistics, Trade Statistics | Comments Closed

DPRK outlines region-specific economic growth plans

Saturday, January 24th, 2009

Institute for Far Eastern Studies (IFES)
Nk Brief No. 09-1-23-1
1/23/2009

Following the recent North Korean New Year’s Joint Editorial and its calls for economic measures, on January 5, more than 100,000 people attended a rally in Pyongyang at which customized economic tasks were presented for each of the North’s provinces, taking into account each region’s particular industrial concentration or specialty.

According to North Korean media reports on January 20, Pyongyang stressed reforms in steel, power, coal, railway, and other sectors it considers ‘Priority Sectors of the People’s Economy.” It also presented tasks for the promotion of housing construction, refurbishment of pig farms, and the increase in production of farms and light industries providing daily necessities to the people of the North.

South Pyongan Province was tasked with increasing the production of ‘Juche’ steel’ at the Chollima Steel Complex, which kicked off the “new revolutionary upsurge” late last year during an on-site inspection by Kim Jong Il, as well as full operation of the newly built ‘superpower electric furnace’, and called on all the people of the province to increase production of organic fertilizer in order to boost food production.

For North Pyongan Province, “mass reforms” for the metalworks sector and concentrated efforts to increase electrical production at the Supung and Taechon power plants were called for. In addition, increased production at the Kujang Earth Colliery Complex, Rakwon Machinery Complex, and the Sinuiju Cosmetics Factory were ordered, as was the institution of advanced agricultural management methods.

Efforts in South Hwanghae Province are to be focused on increasing iron ore mining and scrap iron collection at sites such as the Eunryool and Jaeryung mines, and agricultural production goals are to be met through the introduction of high-yield crops and double-cropping.

North Hwanghae Province was ordered to focus on increasing production at the Hwanghae Iron Complex, the Yesong River Youth Power Plant No. 1, the 2.8 Madong Cement Factory, the Sariwon Poultry Farm, and the Sariwon Pig Farm. In addition, high-yield crops are to be introduced and construction of irrigation systems is to begin, as land management efforts are to be implemented in order to expand agricultural land in Mirubol. North Hwanghae Province is also to build a new library, a new arts theater, and a new housing.

In South Hamgyung Province, efforts are focused on construction of the Keumya River and Keumjin River Guchang power plants, as well as improving mining capacity at the mines in the Danchun area while renovating production facilities at the Sudong Mines. Aggressive promotion of construction on the second stage of the 2.8 Vinylon Complex was also emphasized. Provincial authorities were also ordered to complete the initial stage of refurbishment in the Heungnam Pharmaceutical Plant, improve production at the Kwangpo Duck Farm and the Hamju Pig Farm, and accelerate home construction in Hamheung City.

North Hamgyung Province was tasked with perfecting ‘North Korean-style steel production methodology’ at the Kim Chaek Iron Complex and Sungjin Steel Complex, and modernizing exploration, mining and processing equipment at the Musan Mining Complex in order to boost output, along with bringing the Seodusu Power Plant and Chungjin Thermoelectric Power Plant fully on-line. Another important task prioritized was the completion of the second stage of the Urangchun Power Plant.

In Kangwon Province, construction of the Wonsan Army-People Power Plant, increased production at the Munchon River Ironworks, modernization of the Wonsan Shoe Factory and the Wonsan Textiles Factory, and the refurbishment of the Munchon Poultry Processing Plant were emphasized, along with the diversification of management in farming communities in order to resolve food shortage problems.

Ryanggan Province, in the northern Gosan region, was tasked with improving management of the Samsu Power Plant, which entered service in May 2007, and construction of the Baekdu Mountain Military-first Centennial Power Plant and other electrical facilities, and the establishment of a ‘hometown of potatoes’ for the quick increase in potato cropping.

The Jagang Province was tasked with modernizing its metalworks sector and increasing electrical production at the Gangye Youth Power Plant and Janga River Power Plant, construction of small and medium-sized power plants, and increasing its logging production. Jagang Province was also tasked with normalizing production in its pig, duck, and chicken factories, and software development for local organizations was emphasized as a priority task for the Electronic Business Research Institute in Ganggye City, which was visited by Kim Jong Il after its grand opening last year.

Posted in Agriculture, Chollima Steel Kombinat, Coal, Construction, Electricity, Energy, Food, Kim's New Year Address (Joint editorials), Manufacturing, Ministry of Railways, Railways, Transportation | 3 Comments »

Jeju to offer pig farm to DPRK

Monday, January 19th, 2009

The people of Jeju Island have shipped tangerines to the DPRK for about 10 years. Now they are offering a pig farm:

According to Yonhap:

South Korea’s Jeju Island will send equipment to build a pig farm in Pyongyang on Friday to raise the island’s local specialty, black pigs, officials said.

Black pigs, or “heuk-doe-ji” in Korean, are native to the semi-tropical island. They are covered in black hair, and the meat is popular for being chewy and rich in nutrients.

Jeju will send farm equipment worth 220 million won (US$159,190), such as pens, feeders, heat lamps and ventilators, later on Friday aboard a ship also carrying tangerines and carrots as part of the island’s annual aid to the North. When the farm is completed, possibly by May, the island will ship 100 black pigs that can farrow.

“We expect this will help provide nutrition for children and the elderly in the North and pass down our breeding expertise. Jeju Island is a clean area free from animal infectious diseases,” Kang Won-myoung, a provincial official handling the pig project, said over the telephone.

The Jeju provincial government set up the “South-North Black Pig Breeding Cooperation Project” with North Korea when a group of Jeju citizens and officials visited Pyongyang in late 2007. The project was suspended for about a year amid frozen inter-Korean relations until North Korea formally requested to start the farming last September, the island officials said.

The “Jeju Black Pig Farm” will be built inside Pyongyang Pig Farm, North Korea’s largest such facility, established in 1972.

A Norwegian company recently tried to invest in a pig farm in the DPRK. Unfortunately it did not work out. Read their story here starting on page 86.

The DPRK is working to increase meat production as part of its 2012 “Kangsong Taeguk” campaign.

Read the full story here:
S. Korea’s Jeju Island to build ‘black pig’ farm in Pyongyang
Yonhap
1/16/2009

Posted in 2012 Strong and Prosperous Nation (Kangsong Taeguk), Agriculture, Economic reform, Food, Foreign direct investment, International Aid, South Korea | Comments Closed

DPRK agriculture update

Thursday, January 15th, 2009

On May 12, 2008, The DPRK formally asked the UN World Food Program for emergency food assistance. In June 2008, the UN WFP/FAO launched the “Rapid Food Security Assessment”. They confirmed…

…a significant deterioration in food security in most parts of the country.3 Close to three quarters of respondents have reduced their food intake, over half are reportedly eating only two meals per day (down from three) and dietary diversity is extremely poor among two thirds of the surveyed population. Most families have daily consumption consisting of only of maize, vegetables and wild foods, a diet lacking protein, fats and micronutrients.

and

FAO forecasts that the October/November 2008 harvest will be 70-75 percent of an average year’s output due to inadequate fertilizer supplies, meaning the current food shortages will extend into the next agricultural year. The risk that the country will again suffer summer flooding remains, which could lead to further crop destruction and/or require general food distributions of emergency food aid. In such an event, WFP will have contingency stocks available in the country to rapidly respond. (UN Operations Report)

The UN launched a coordinated response lasting from September 2008-November 2009 which targets over 6 million people with 600,000 metric tons of food assistance.

But according to the Daily NK (Jan 13, 2009):

According to North Korean authorities, the total agricultural yield including rice, corn, potatoes and others reached its highest point since the food shortages of the 1990s this year, at 4.7 million tons.

According to the Joongang Ilbo, a South Korean newspaper, a Chinese official involved in the agricultural business who had just gotten back from North Korea quoted a North Korean official as saying that they “had presumed the failure of last year’s harvest due to low temperatures in the Spring and Fall, but in fact recorded the highest level in recent years, 4.7 million tons.”

Regarding this, a researcher from the Korea Rural Economic Institute, Kwon Tae Jin said in a telephone conversation with the Daily NK that, “When I visited Pyongyang in December of last year, Ri Il Sok, Director of the Foreign Cooperation Team in the North Korean Ministry of Agriculture said to me that grain output last year was 4.67 million tons, up by 17 percent over a year ago.” (Daily NK)

Andrei Lankov, writing in tomorrow’s Asia Times (Jan 16), confirms the Daily NK story:

These worries seemed well-founded and the journalists who penned them were often among the most knowledgeable on North Korean issues. Furthermore, most of these stories were based on reports produced by reputable international organizations. By early September, North Korean watchers agreed almost unanimously that a great disaster was set to strike North Korea this coming winter.

Now it has become clear, however, that these were false alarms. The predicted famine has not materialized and does not appear likely to do so in the near future. North Korea has had its best harvest in years, and until next summer no North Korean is likely to starve to death – although some may remain severely malnourished.

This is good news. However, the contrast between the reality and recent predictions is remarkably stark. In recent years, we have come to believe that there are at least a few things about secretive North Korea which are known for sure. Yet the recent turnaround of events has again shed light on the severe limits of outside information about the Hermit Kingdom.

Lankov offers a couple of scenarios that could explain how this happened:

For example, why did reputable international organizations make such a serious mistake in estimating the North’s food shortage? It cannot be ruled out that international observers were deliberately misled by their North Korean minders. Perhaps foreign observers were shown the worst fields because the North wanted more food aid then would otherwise be available?

It also seems that some basic assumptions about North Korean agriculture are wrong. Unless the 2008 harvest was the result of incredible luck, it seems to indicate that fertilizer is far less important than previously believed. It is possible that North Korean farmers have devised strategies to deal with fertilizer shortages.

The false alarms of a disastrous famine in North Korea are a sober reminder that when dealing with the world’s most secretive society, predictions should be treated with the greatest caution.

To learn more, read the following documents/stories:
Emergency Operation Democratic People’s Republic of Korea
Title: 10757.0 – Emergency Assistance to Population Groups Affected by Floods and Rising Food and Fuel Prices
UN World Food Program

2008 Agricultural Yield of North Korea
Daily NK
Kim So Yeol
1/13/2009

North Korea reaps a rich harvest
Asia Times
Andrei Lankov
1/16/2009

North Korean Economy Watch topic archives:
Food, Agriculture, Foreign Aid Statistics

Posted in Agriculture, Agriculture statistics, Food, Foreign aid statistics, Statistics, UN, UN Food and Agriculture Organization, UN World Food Program | Comments Closed

Some “good” news from North Korea

Friday, January 9th, 2009

On market regulations: North Korean authorities issued three decrees restricting market activity: 1. Markets may only open once every 10 days 2. Only vegetables, fruits, and meat from private citizens can be sold in the markets. Imported goods and products of state-owned companies are prohibited 3. To reduce the influence and growth of professional merchants, market booths will be allocated on a first-come, first-served basis (no fixed locations).

The “good” news is that the authorities are having trouble implementing these rules:

A Pyongyang source said in a phone conversation with Daily NK on the 7th, “Until now, markets in Pyongyang have been opening at 2 PM every day and operating normally. They are only closed once a week, on Mondays as usual.”

However, the sale of imported industrial goods from China such as clothing, shoes, cosmetics, kitchen utensils and bathing products has become more restricted in the market. Subsequently, street markets or sales of such goods through personal networks have become increasingly popular.

The source noted, “Inspection units regulate the markets with one eye closed and the other eye open, so it is not as if selling is impossible. With a bribe of a few packs of cigarettes, it is easy to be passed over by the units. However, the sale of industrial goods has rapidly decreased and, if unlucky, one can have his or her goods taken, so the number of empty street-stands has been increasing.”

So many North Koreans now buy Chinese kitchen utensils in the same way Americans purchase cocaine!

But even in Pyongyang they are having troubles enforcing the new rules:

“Since December, rations in Pyongyang have consisted of 90 percent rice and 10 percent corn and in the Sadong-district and in surrounding areas, rice and corn have been mixed fifty-fifty percent.”

“It has even been difficult in Pyongyang, where rations are provided, to convert to 10-day markets due to opposition from citizens, so restricting sales in the provinces, where there is virtually no state provision, is impossible in reality. It is highly likely that the recent measure will end as an ineffective decree, like the ones to prohibit the jangmadang or the sale of grain”[.]

On North Korea’s information blockade: Radio Free Asia published an informative article on the ability and propensity of North Koreans to monitor foreign broadcasts. The “good” news is that access to unauthorized information continues to grow.

The whole article is worth reading (here), but here is an excerpt:

North Koreans manage to gain limited access to foreign media broadcasts in spite of increasing government crackdowns in the isolated Stalinist state.

“We clamped down on the people watching South Korean television sets, but it wasn’t easy,” a North Korean defector and former policeman who monitored North Koreans’ viewing habits said. He said channels fixed by the North Korean authorities could easily be altered to catch South Korean programming.

“You could watch South Korean television such as KBS and MBC in Haeju, Nampo, Sariwon, even in Wonsan,” he said, referring to regions of Hwanghae province, just north of the border with South Korea.

“They reach also to the port cities near the sea. But you can’t watch them in Pyongyang because it’s blocked by mountains.”

He said the police themselves used to watch South Korean television “all the time” along with their superior officers.

“We would enjoy what we watched, but outside in public, we would praise the superiority of our socialist system. We knew it was rubbish.”

“According to North Korean defectors interviewed who came to South Korea right after living in the North, educated, intelligent people in North Korea do listen to foreign stations despite the inherent danger,” Huh Sun Haeng, director of the Center for Human Rights Information on North Korea, said in a recent interview.

He said he made good money fixing people’s radios, so they could get better reception of foreign broadcasts.

“I made good money readjusting channels on radios, or upgrading them with higher frequency parts for local people who want to listen to broadcasts other than the North’s state-run radios. There were at least a few hundred people that I know of who listened to foreign broadcasts,” he said.

He said no television reception reached the northern part of the country near the Chinese border, so people there watched recorded programs on videotape and video CD (VCD) instead.

Read the full articles here:
Pulling Back from Converting to 10-day Markets
Daily NK
By Jung Kwon Ho
1/9/2009

Growing Audiences for Foreign Programs
Radio Free Asia
Original reporting in Korean by Won Lee
1/8/2009

Posted in Agriculture, Communications, Food, General markets (FMR: Farmers Market), Labor conditions/wages, Light Industry, Manufacturing, Public Distribiution System (PDS), Radio, South Korea, Telephones | 1 Comment »

Rice on the way, but still no tangerines

Wednesday, January 7th, 2009

Although the South’s annual tangerine shipment to the DPRK has been ~~suspended~~ reduced (and Seould has suspended direct financial support), food aid from other South Korean groups continues unabated. According to Yonhap:

The Korea Peasants League said they have arranged to have a ship collect rice from across the country at ports along the coast. The boat left the southern island of Jeju on Monday and will depart from the port of Incheon, west of Seoul, on Friday. It will likely arrive at the North Korean port of Nampo on the same day if weather conditions at sea are normal, they said.

Non-governmental aid has continued amid the political stalemate. The South Korean government suspended its customary food and fertilizer aid to the impoverished state last year as North Korea cut off dialogue and intensified an anti-Seoul media tirade.

A Seoul-based Buddhist organization, the Jungto Society, shipped food aid worth 380 million won (US$293,436) intended for mothers and children in North Korea last week.

This week’s shipment by the Peasants League includes some 60 tons of rice donated by the Korean Confederation of Trade Unions, a labor umbrella group. The union group and the farmers are calling for legislation that would implement the regular delivery of rice aid to North Korea.

Read the full article here:
S. Korean farmers to send rice to N. Korea amid frozen relations
Yonhap
1/7/09

Posted in Agriculture, Agriculture statistics, Food, Foreign aid statistics, Jungto Society, Korean Confederation of Trade Unions, Statistics | Comments Closed

2008 Top Items in the Jangmadang

Thursday, January 1st, 2009

Daily NK
Park In Ho
1/1/2009

The marketplace has become an extremely important ground in North Korean people’s lives. 70 percent of North Korean households in the city live off trade, handicrafts and transportation businesses related to trade. If the jangmadang works well, people’s living situation is good, otherwise it is not. In the situation where the food distribution system has broken down, the whole economic existence of the populace is bound up in jangmadang trade.

Trade is bound to generate successful merchants but also failures, due to a lack of know-how or confiscation of products by the People’s Safety Agency (PSA), or simply because a competition system operates. These failures in the jangmadang do not have any second opportunity to rise again so they frequently choose extreme acts like defection, criminality or suicide. Failure is serious.

However, the revitalization of markets has caused great changes in North Korean people’s values. The individual-centered mentality among the people is expanding and the belief that money is the best tool is also spreading. Due to such effects, the North Korean communist authorities in 2008 made the regulation to prohibit women younger than 40 years old from doing business, but of course the people use all necessary means to maintain their survival.

Daily NK investigated the 2008 top ten items in the jangmadang, so as to observe developments in North Korean society.

1. Rice in artificial meat, the first instance of domestic handicraft

Since 2000, the most ubiquitous street food has been “rice in artificial meat,” which is made from fried tofu with seasoned rice filling. This food is found everywhere on North Korean streets. One can find women who sell this snack in alleys, at bus stops and around stations. It costs 100 to 150 North Korean Won.

Meanwhile, the most popular street food is fried long-twisted bread. Individuals make the fried bread at home and sell it on the street. The length of the fried bread is around 20 centimeters and it sells for 100 won.

In around 2005 corn noodles were popular on the streets, but now street-stands for noodles have largely disappeared due to the existence of a permanent store controlled by the state.

These days, if one can afford to eat corn noodles, at approximately 1,000 won for a meal, one can safely say that one is living comfortably.

2. Car battery lights North Korea

The reason why North Korean people like car batteries is that the authorities provide a reliable electricity supply during the daytime, when consumption is less than at night, but at night they don not offer it. The authorities shut down the circuit from around 8 PM to 9PM, and from 12 AM to 2 AM: when the people watch television the most.

As a result, the people charge their car batteries during daytime and use it at night. A 12V battery can run a television and 30-watt light bulb. If they utilize a converter, they can use a color television, which needs more electricity.

Ownership of batteries is a standard of wealth. Officials use electricity from batteries in each room. They usually draw thick curtains in their rooms, to prevent light shining through that might draw attention to their status.

3. The strong wind of South Korean brand’ rice-cooker, Cuckoo

A South Korean brand pressure rice-cooker called Cuckoo appeared as a new icon for evaluating financial power among North Korean elites.

It has spread from the three Chinese northeast provinces into North Korea. In North Korea, Chinese rice and third country aid rice, dry compared to Korean sticky rice, generally circulates, but if the lucky few use this rice-cooker, they can taste sticky rice the way Korean people like it.

There are Cuckoo rice-cookers from South Korean factories that arrive through Korean-Chinese merchants, and surely other Cuckoo products from Chinese factories. These two kinds of rice-cookers, despite having the same brand name, sell for different prices.

The Chinese-made Cuckoo sells for 400,000-700,000 North Korean Won (approximately USD114-200), while the South Korean variety costs 800,000-1,200,000 (approximately USD229-343). A Cuckoo rice-cooker tallies with the price of a house in rural areas of North Korea. According to inside sources, they are selling like wildfire.

4. An electric shaver only for trips

The electric shaver is another symbol of wealth.

It is not that they use electric shavers normally, because one cannot provide durability. At home, North Korean men generally use disposable shavers with two blades made in China or a conventional razor. However, when they take a business trip or have to take part in remote activities, they bring the electric shaver.

There are North Korean-made shavers but most are imported from China. Among Chinese products, you can see “Motorola” products and fake-South Korean products with fake labels in Korean. A Chinese-made electric shaver is around 20,000-40,000 North Korean Won.

5. Chosun men’s fancy shoes

Dress shoes are one of the most important items for Chosun men when they have to participate in diverse political events, loyalty vows or greeting events at Kim Il Sung statues on holidays. Right after the famine in the late 1990s, it was considered a symbol of the wealth, but now general workers, farmers and students are wearing dress shoes.

The shiny enameled leather shoes with a hard heel cannot be produced in North Korea because of a lack of leather. The North Korean authorities provide the National Security Agency (NSA) and officers of the People’s Army with dress shoes, which are durable but too hard and uncomfortable.

Shoes for general citizens and students are mostly made in China and some are produced in joint enterprises in Rajin-Sunbong. The price of shoes ranges from 30,000 to 100,000 Won depending upon the quality.

6. Cosmetics prosper despite the economic crisis

Cosmetics and accessories for women are getting more varied. Lately, false eyelashes have appeared in the jangmadang in major cities. Chinese cosmetics are mainly sold, alongside fake South Korean brands. In Pyongyang, Nampo, Wonsan and Shinuiju Chinese and even European cosmetics are on sale.

“Spring Fragrance,” a North Korean luxury cosmetics brand, is famous for being Kim Jong Il’s gift that he presents to women soldiers or artists when he visits military units or cultural performances. It costs more than 200,000 North Korean won.

Lotions for women, made in China, are approximately 2,000-4,000 won, foundation cream is 3,000-5,000 won, and lipstick is from 500 won to 2,000 won. Hand cream is 3,000-5,000 won.

7. Hana Electronics recorder, the biggest state-monopoly production

“Hana Electronics” was originally set up to produce CDs and DVDs of North Korean gymnastic performances or other artistic performances, so as to export them foreign countries. The company has been producing DVD players since 2005.

Due to the state monopoly, the DVD player of the Hana Electronics dominates the market. North Korean people call a VCR and a DVD player a “recorder.” Since around 2005, after the booming interest in South Korean movies and dramas, the players have been selling very well.

At the beginning, North Korean visitors to China brought the DVD or CD players into North Korea, but as they got popular among the people, Chinese-made players were imported from China and since 2006 they have been really popular in every jangmadang.

Accordingly, since 2006, the authorities have started blocking the importation of the Chinese player and are selling the Hana Electronics players, which sell for around a 20 or 30 percent higher price than Chinese players in state-run stores. Now, they can be sold in the jangmadang by private merchants and comparatively free from inspection by the PSA. The prices are 130,000-150,000 won.

8. Bicycles are basic, the motorcycle era is here now

In major cities, numbers of motorcycles are increasing. Especially in border regions where smuggling with China is easier than in other cities, motorcycles are common.

The motorcycles are ordinarily used for mid or long distance business. Most motorcycles are made in China and some are Japanese second-handed products, which sell for 1.5-2.5 million won. 125cc new products are over 5 million won. The cheapest second-handed motorcycle is 500,000 won.

9. Vinyl floor covering for the middle class and vinyl for the poor

Demand for vinyl floor coverings and vinyl has been increasing since the late 1990s, when residential conditions improved. In the late-1990s people had to use sacks of cement or Rodong Shinmun (newspaper) as a floor covering, but now they are using vinyl floor coverings.

Uses for vinyl are unimaginably diverse: from a basic protection against wind and cold to when people take a shower at home in the vinyl tunnel hung on the ceiling of the bathroom.

Depending on the thickness and width, there are four or five kinds of vinyl in the jangmadang for from 150 to 500 won. Vinyl floor covering is a Chinese product selling for from 3,000 to 10,000 won.

Posted in Agriculture, Black markets, Clothing, Cosmetics, Economic reform, Electricity, Energy, Food, General markets (FMR: Farmers Market), Manufacturing, Ministry of People’s Security (Criminal Police), Ministry of State Security (MPSS, NSA, SSD), Price liberalization, Television | Comments Closed

Status of US food aid deliveries to North Korea

Tuesday, December 30th, 2008

(UPDATE BELOW)
Press Statement by Sean McCormack
December 30, 2008
US Department of State web site

Question: Will you please provide an update on the deliveries of food aid to North Korea?

Answer: To date, over 143,000 metric tons of U.S. food (wheat, corn, and soybeans) has been delivered to North Korea. Of that amount, the latest shipment of 25,000 metric tons of corn and soybeans arrived in North Korea on November 23 and has completed unloading for distribution by the U.S. NGOs. The latest shipment of food aid (totaling 21,000 metric tons), which was expected to arrive by the end of December, is now expected to arrive in the DPRK on January 2, due to recent rough seas.

The United States has not stopped food aid to North Korea. Under the terms of our agreement with the DPRK, there is to be no limit imposed on the Korean language capabilities of the World Food Program (WFP) and U.S. NGO staff implementing the food aid program. The lack of sufficient Korean speakers on the WFP program is one of the key issues in ongoing discussions. The issuance of visas for Korean-speaking monitors for the WFP program is another issue currently being discussed, along with other technical issues. A delegation that recently visited North Korea, identified problems in the implementation of the world food program portion of the food aid program. Those problems are not yet resolved.

Under the most recent agreement reached at the six party talks, the US has committed to sending 500,000 tons of food assistance to North Korea within the 12 months beginning in June 2008. So far the US has shipped 143,000 tons.

South Korean civil society is also contributing:

Two South Korean charities say they’ve shipped food and fuel to impoverished North Korean families suffering in the cold.

A shipment of food for babies and their mothers worth about $302,300 is to be distributed in Hoeryong by the Seoul-based Jungto Society, a Buddhist group, Yonhap News Agency reported Tuesday.

Families in Hoeryong are particularly vulnerable because the town sits on the remote northeastern tip of North Korea and and receives less assistance from other regions, said Kim Ae-Kyung, a Jungto spokesman.

The shipment includes dried seaweed powder, flour, milk powder, sugar and salt for 2,500 mothers and 6,300 infants and children.

Another South Korean charity, Briquet Sharing Movement, said it has delivered 50,000 charcoal fuel briquets to North Korean border towns Kaesong and Kosong.

In all, the two towns have received 800,000 briquets from the charity this year, enough to help heat 3,200 homes, Yonhap reported.

(UPDATE) From the Korea Times:

[T]he “Easter Star” was en route to the reclusive country with 21,000 metric tons of corn and will soon arrive at the port of Nampo.

American NGOs, such as Mercy Corps, World Vision and Global Resource Service will distribute the aid in Jagang and North Pyeongan Provinces, the official added. The State Department originally expected the aid to reach the port by the end of this month.

It will be the sixth shipment of the 500,000 metric tons of promised food aid. In May, the U.S. agreed to resume the aid in June for 12 months. The United States given 143,000 metric tons of food assistance so far, State Department spokesman Sean McCormack told reporters in Washington last week.

The NGO official also said 4,940 metric tons of a corn-soya blend and corn oil will be separately shipped to North Korea in mid-January as the seventh shipment, and NGOs will distribute them in the same regions.

NGOs have been a regular channel for Washington to distribute its promised assistance. The World Food Program under the United Nations has also distributed food assistance on the U.S. government’s behalf.

The shipment will be the first aid package reaching North Korea after talks on dismantling the North Korean nuclear program came to an abrupt end without substantial agreement in early December.

In spite of the stalemate on the nuclear issue, McCormack said, “Our humanitarian program will continue.” U.S. attention is now shifting to stationing Korean-speaking staff working with the WFP and NGO programs at the point of distribution.

Read the full articles here:
Charities send food, fuel to North Korea
UPI News
12/30/2008

US Corn Aid to Arrive in North Korea Jan. 3
Korea Times
Kim Se-jeong
12/28/2008

Posted in Agriculture statistics, Briquet Sharing Movement, Food, Foreign aid statistics, International Aid, Jungto Society, Statistics, UN, UN World Food Program, USA | Comments Closed

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