Archive for the ‘Health care’ Category

North Korean market prices suggest serious food shortages

Tuesday, June 20th, 2023

By: Benjamin Katzeff Silberstein

Recently, the BBC became one of few global outlets to succeed in interviewing ordinary North Koreans inside the country about the food situation. The image is dire: starvation, empty markets and other signs of severe food shortages.

In the past few years when reports of food scarcity have surfaced from North Korea, market prices have given remarkably little credence to the claims. Not so at the moment. Comparing current prices levels with historic ones, the overall picture suggests that prices since the onset of the Covid-19 pandemic (and the North Korean government’s border closure), market prices have moved to a permanently higher level, indicating that overall supply of food is lower. This does not give us a specific number on how severe the food shortage is, but it gives quantitative evidence that food has become significantly scarcer since the onset of the pandemic.

To show this, I use market price data gathered and reported by Rimjingang, an online news outlet with sources inside North Korea that regularly publish market prices. I chose this specific data set because it is transparent and specific about where in the country the data comes from. Due to tightened border controls under Kim Jong Un’s tenure, information from inside North Korea has become even more difficult to access. Therefore, transparency about the data is crucial.

The price data almost exclusively comes from the region bordering China, such as Ryanggang and North Hamgyong provinces. The border region is different from the rest of the country in several crucial respect, perhaps most crucially in that it is much more involved in trade and smuggling with China than other regions. Nonetheless, the North Korean market system is integrated to some extent, with goods being transported around the country for sale. Although dilapidated infrastructure and harsh state regulations make internal travel difficult, the overall price trends very likely hold for the national level.

 

Market changes after Covid-19

Prices fluctuate frequently on North Korea’s markets, but usually within a more or less fixed span. The following graph shows prices for North Korea’s two main staple goods, rice and corn, from 2017 until mid-June this year. The prices are shown in renminbi, the most commonly used foreign currency in the border region, to check for inflation in the North Korean currency, Korean People’s Won (KPW).

The left side of the graph shows prices before Covid-19. Aside from a few nonsignificant bumps, prices hovered between 1–1.5 RMB for corn and 3.5 RMB for rice for the most part prior to the inception of the pandemic, fluctuating throughout the year. Interestingly, although North Korea closed its borders in January 2020 to protect against the virus, prices don’t truly begin to move until October that year.

Over the course of the next few months, however, prices for both rice and corn climbed significantly.

Rice prices rose from their regular level to move between 4 and close to 6 RMB in late 2020 and early 2021 and shot up drastically during the spring and summer months, the lean season before the fall harvest, when the storage of food begins to dry up. Prices normally go up during this season, but perhaps a spreading awareness that the border wouldn’t open anytime soon pushed prices up much further than normal. After shooting up to close to 15RMB and remaining much higher than normal for several months, prices stabilized at an interval between 8 and 4.5–5 from the fall of 2021 and onward. Prices have been moving around 5RMB since the end of 2022. That is an approximate 1.5RMB difference from the normal price level, or 42 percent.

On the one hand, prices now are much more stable than last year’s fluctuations to very high levels. On the other hand, the price level is now permanently higher, meaning that North Korean consumers face a permanently higher price level. Higher prices, logically, suggest that supply has dropped. In other words, with food supply lower, people must pay significantly more for the same amounts of food.

We see the same dynamics in prices of corn. Graph 3 below show corn prices from the fall of 2017 until the latest observation in mid-June:

Corn is a generally less preferred staple good for North Korean consumers, meaning that people tend to increase their consumption of corn when food overall becomes more expensive. From moving around 1.5RMB/kg before the pandemic, corn prices climbed significantly from late 2020, hitting almost 3RMB – a doubling of the normal price level – by March 2021. Prices then climbed further during the rest of the year and hovered around 4RMB in the late summer and fall. Since late 2022, prices have moved between 2.3 and close to 3RMB, meaning they have increased by at least more than half on the lower end of the spectrum, and doubled for the higher end.

Conclusion

None of this is evidence of a widespread famine in North Korea, and the BBC’s three eyewitness testimonies also do not fully prove anything of the sort. But that the country is experiencing a significant food shortage seems beyond doubt, as suggested both by reports from people inside the country as well as market prices. These prices do not tell the full story. The situation likely varies significantly between regions, and the state appears to have increased food ration distributions to parts of the public (see one example here). That trade with China has continued to open up little by little in 2023 has probably contributed to food prices stabilizing as well. Still, current price levels remain far higher than normal. For a population’s whose margins are mostly very small, if it doesn’t amount to starvation, it means that an already difficult situation has gone from bad to worse.

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North Korean authorities call street vending a “crime against the people”

Wednesday, December 8th, 2021

Benjamin Katzeff Silberstein

Reports Daily NK:

North Korean authorities recently designated streetside commerce as a “crime against the people” and have begun ideological education efforts to tamper down discontent surrounding government crackdowns on street merchants.

Daily NK recently obtained “political activity materials” written by the Central Committee’s Propaganda and Agitation Department entitled “Let’s Completely Eliminate the Phenomenon of Commerce near Markets and in the Streets.” The materials were used during lectures at factories, enterprises and inminban (people’s units) throughout the country from early to mid-November.

The materials start by saying, “COVID-19 is causing great anxiety and concern in the international community as it spreads throughout the entire world, while the appearance of variants is causing a major global disaster.”

The materials then say that with the authorities declaring a national quarantine emergency and closing the border to stop infections, some “unawake” people were in a flap over “temporary difficulties” and obstructing quarantine efforts by carrying out “chaotic” commerce near markets and on the streets. Essentially, the authorities are stressing the justification for the controls on streetside commerce.

Daily NK previously reported that North Korean authorities — led by the Ministry of Social Security — have strengthened their controls on streetside commerce since March, forcefully confiscating the wares of so-called “grasshopper merchants,” as streetside merchants are called in North Korea. They have gradually strengthened their crackdown since then, dragging off people involved in the trade to forced labor camps.

Despite the “mop-up operation,” however, locals reportedly continue to engage in streetside commerce to overcome economic difficulties brought on by the COVID-19 pandemic, evading surveillance by regulators. People have also expressed considerable bitterness over being prevented from doing business as they like. Aware that people are very unhappy, the authorities have begun ideological education efforts in response.

The materials condemned “many people” for “creating disorder near markets and on the street, failing even to wear masks” and “threatening quarantine efforts by serving food of questionable sanitation and safety,” all out of an obsession with “earning just a few coins more.”

(Source: Kim Chae Hwan, “North Korea calls streetside commerce a ‘crime against the people’,” Daily NK, 6/12/2021.)

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North Korea’s tense food situation

Tuesday, December 7th, 2021

By Benjamin Katzeff Silberstein

As usual, it’s very difficult to get a read on the domestic availability and production of food in North Korea. Nonetheless, the overarching picture continues to be grim, and the fears over the Omicron-variant seems to be making it all worse. This is also what the South Korean government assesses:

The cost of groceries and daily necessities in North Korea is estimated to be rapidly increasing in the face of a prolonged border lockdown to stave off the COVID-19 pandemic, Seoul’s unification ministry said Monday.

The North has imposed a strict border control since last year, which is believed to have taken a toll on its economy already hit by crippling sanctions.

“North Korea is experiencing chronic food shortages with around 1 million tons of foods falling short every year,” ministry spokesperson Lee Jong-joo told a regular press briefing. “As the coronavirus-driven border lockdown has prolonged, it is likely to be having difficulties in securing necessary foods from abroad.”

The North was seen preparing to reopen its land border with China, with South Korea’s spy agency estimating its cross-border rail services could resume as early as in November. But the spread of the omicron variant is apparently delaying the reclusive regime’s planned border reopening.

“Though we do have limits in having access to accurate information, the government’s estimation … is that the volatility of foods and necessities prices is growing (in North Korea) and some items are witnessing a rapid price hike,” Lee said.

Yet, referring to experts’ assessments the North’s crop output could improve this year due to better weather conditions, she said the government will continue monitoring its situation in line with a review on the need for a humanitarian cooperation.

(Source: “Prices of food, daily necessities estimated to be rapidly soaring in N. Korea: gov’t,” Yonhap News, 6/12/21.)

The last paragraph here is a crucial caveat, as North Korea’s food production is highly volatile and dependent on weather conditions. Over the past few years, there have sometimes been reason to suspect that the state has exaggerated the direness of its food situation rather than the other way around.

Nonetheless, it’s clear that the prolonged border closure is hitting hard against the economy as a whole. There have been several reports over the past few months indicating that Pyongyang might soon unseal the border, but no major changes seem to have taken place. I’m not sure that means those reports were necessarily wrong. Rather, the government may well have planned to ease the border lockdown at several points only to back down in the face of a new development, be it Covid-19 spreading in China’s northeast, or the rise of the Omicron variant.

It’s difficult to see what could really change if the government continues to both refuse to let the outside world assist in a vaccination campaign, and at the same time responds to each new wave or variant of the virus by further tightening or extending the border lockdown. It’s not a sustainable strategy but given the regime’s fear of the havoc that a significant spread of the virus could wreak in society, given its very fragile health system, it might not change anytime soon.

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North Korea’s convenient but remarkable admission of likely Covid-19 case

Sunday, July 26th, 2020

By: Benjamin Katzeff Silberstein

So, it finally happened: North Korea has officially admitted the suspected existence of a Covid-19 case in the country. State media claims the virus was brought over by a so-called re-defector, who first left for South Korea a few years ago only to return now, reportedly by swimming across the Imjin river. Some South Korean media speculation seems to confirm that a re-defection did happen, reportedly by someone swimming across the Imjin river, though none of this is confirmed. Here is the North Korean statement in full:

Pyongyang, July 26 (KCNA) — Amid the intensified anti-epidemic campaign for thoroughly checking the inroads of the world’s threatening pandemic, an emergency event happened in Kaesong City where a runaway who went to the south three years ago, a person who is suspected to have been infected with the vicious virus returned on July 19 after illegally crossing the demarcation line.

The anti-epidemic organization said that as an uncertain result was made from several medical check-ups of the secretion of that person’s upper respiratory organ and blood, the person was put under strict quarantine as a primary step and all the persons in Kaesong City who contacted that person and those who have been to the city in the last five days are being thoroughly investigated, given medical examination and put under quarantine.

The Political Bureau of the Central Committee of the Workers’ Party of Korea convened an emergency enlarged meeting in the office building of the Central Committee of the WPK on July 25 as regards the dangerous situation in Kaesong City that may lead to a deadly and destructive disaster.

Kim Jong Un, chairman of the WPK, chairman of the State Affairs Commission of the Democratic People’s Republic of Korea and supreme commander of the armed forces of the DPRK, was present at the meeting.

Attending the meeting also were members and alternate members of the Political Bureau of the C.C., WPK.

Present there as observers were members of the Central Emergency Anti-epidemic Headquarters.

Party and administrative leading officials of the Cabinet, ministries and national institutions, members of the executive committees of provincial Party committees and senior officials of the leading institutions at provincial level were present in the video conferencing rooms as observers.

Upon authorization of the Political Bureau of the C.C., WPK, Supreme Leader Kim Jong Un presided over the meeting.

Despite the intense preventive anti-epidemic measures taken in all fields throughout the country and tight closure of all the channels for the last six months, there happened a critical situation in which the vicious virus could be said to have entered the country, the Supreme Leader said, adding that he took the preemptive measure of totally blocking Kaesong City and isolating each district and region from the other within July 24 afternoon just after receiving the report on it.

To tackle the present situation, he declared a state of emergency in the relevant area and clarified the determination of the Party Central Committee to shift from the state emergency anti-epidemic system to the maximum emergency system and issue a top-class alert.

He specified tasks for each sector to be immediately implemented by Party and working people’s organizations, power organs, public security and state security institutions, anti-epidemic and public health institutions.

The meeting unanimously adopted a decision of the Political Bureau of the Central Committee of the WPK on shifting from the state emergency anti-epidemic system to the maximum emergency system.

He instructed all the participants to immediately conduct follow-up organizational work to carry out the decision of the Political Bureau of the Party Central Committee in their fields and units, and party organizations at all levels and every field to ensure and guarantee the most correct implementation of the directions and assignments of the Party Central Committee with a sense of boundless responsibility, loyalty and devotion.

He underscored the need to thoroughly maintain tough organizational discipline and ensure the unity in action and thinking throughout the Party and society, to keep order by which everyone absolutely obeys and moves as one under the baton of the Emergency Anti-epidemic Headquarters and the need for party organizations at all levels to perfectly perform their role and duty.

Saying that everyone needs to face up to the reality of emergency, he appealed to all to overcome the present epidemic crisis by not losing the focus of thinking and action, practicing responsibility and devotion to be faithful and true to the leadership of the Party Central Committee, being rallied closer behind it so as to defend the welfare of the people and security of the country without fail.

The meeting sternly took up the issue of the loose guard performance in the frontline area in the relevant area where the runaway to the south occurred, and decided that the Central Military Commission of the WPK would get a report on the results of an intensive investigation of the military unit responsible for the runway case, administer a severe punishment and take necessary measures. -0-

(Source: “Supreme Leader Kim Jong Un Convenes Emergency Enlarged Meeting of Political Bureau of WPK Central Committee,” Korean Central News Agency, July 26th, 2020.)

This is of course makes for extremely convenient optics for the North Korean regime, and raises lots of questions.

First, to state the obvious: this would make for an extremely convenient way for the regime to admit the existence of Covid-19 in the country. I have written previously about how unlikely the regime claim of zero cases is. The message is: our anti-epidemic measures, such as closing the northern border, were flawless. But one case still slipped through the cracks. Having a first confirmed case coming in from the south relieves the regime of any awkwardness vis-a-vis China.

Second: this is all still very strange. How can the political and strategic cost be smaller of admitting a glitch in the southern frontline defenses? Look at the text in the statement: “loose guard performance in the frontline area” is not a small thing to admit. It’s far from unprecedented criticism, but still. What does it say about morale and readiness within the army that even at a time of relatively high tensions, “loose guard performance” can happen?

Third and relatedly: this is a lot of fuss for a suspected case. Kim Jong Un not only called an emergency politburo meeting, a major event in its own right. The state has also placed all of Kaesong under lockdown and required anyone that traveled to the city within the past five days to go into quarantine. Just imagine how many people in North Korea must be going around with symptoms that should cause suspicion of Covid-19. The sniffles and a subpar sense of smell and taste should be enough. And yet, this is the first time we’ve seen this sort of alarm.

Fourth: how was this detected, and why was this person specifically taken in for testing? Judging from the statement, he was able to slip back into North Korea undiscovered, only to proceed to move around freely in Kaesong and potentially spread the virus. Was he brought in for testing because he came in from South Korea, or because of specific symptoms? What happens to the undoubtedly more numerous arrivals from China – are they all placed under stringent quarantine? Kaesong is far less connected to the outside world than are other parts of North Korea. The chances of it spreading there but not in the north are…extremely, incredibly slim, at best.

In short, it’s very difficult to buy this as a credible explanation or excuse for a Covid-19 outbreak in North Korea. The virus has most likely been around for some time, perhaps something has now prompted the authorities to need to make an official admission. As always, all we can do is await more information and hope that some questions are answered.

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The Pyongyang General Hospital and Kim Jong Un’s “Benevolent Dictator” Economics

Tuesday, July 21st, 2020

By: Benjamin Katzeff Silberstein 

On Monday (July 20th), Kim Jong Un visited the construction site for the Pyongyang General Hospital and unleashed some rather scathing criticism against the management of the project. An excerpt from KCNA:

Noting that it is making a serious digression from the Party’s policy in supplying equipment and materials to go against the intention of the Party which initiated the construction for the people and mapped out its operation, he severely rebuked it for burdening the people by encouraging all kinds of “assistance”.

Saying that the construction coordination commission failed to solve all the problems in conformity with the Party’s policy line, he said in the strong terms that if such situation is left to go on, the noble plan and intention of the Party which initiated the glorious and worthwhile construction for the good of the people could be distorted and the image of the Party be tarnished.

He instructed the relevant departments of the Party Central Committee to investigate the performance of the construction coordination commission as a whole and replace all the officials responsible and make strict referral of them.

Pointing out that though the construction work of the hospital was being pushed ahead thanks to the patriotic zeal and devoted efforts of the builders […].

(Source: “Supreme Leader Kim Jong Un Gives Field Guidance to Pyongyang General Hospital under Construction,” Korean Central News Agency, July 20th, 2020.)

The Pyongyang General Hospital project was destined for hurdles from the very beginning, as this article explores. Kim has personally emphasized how central it is to finish hospital construction by the deadline of October 10th this year, when the Korean Worker’s Party will celebrate its 75th anniversary.

With such time pressure for construction, worksite conditions were always going to be problematic. The politically motivated deadline, moreover, increases the risk of shoddy construction work. Rather than serve the general public at large, the hospital, whenever finished, is likelier to cater to the sociopolitical elite who can pay their way and, perhaps, to medical tourism.

Kim’s criticism against construction officials, however, is about much more than the hospital construction project itself. It relates to the very structure of the North Korean system, and of communist economies in general. This sort of criticism really is a standard performance in a decades-old genre, where the supreme leader shows himself to be on the side of the people by pinning the blame for any problems and suffering among the population on lower-ranking officials.

Kim’s public criticism of the construction management officials is, in other words, not exceptional, but a standard mechanism and a feature of North Korea’s economic system. Much in North Korean governance may be subject to dynamic change, but the one constant is that the leader can hardly ever be at fault.* To hold this constant, someone else must be blamed when economic plans don’t go the way they should. Never mind that the leader often rules by directives that are often vague and given in off-the-cuff-statements, left to subordinates to interpret and implement as best as they can. Problems like this are almost inevitable in an economy like North Korea’s, still in structure very much a command economy despite significant relaxations over the past few decades.

Thus, when the Soviet Union’s industrialization plan didn’t proceed as intended, it had to be the fault of wreckers working for foreign powers. Stalin himself could never be at fault. In the same way, it cannot, by definition, be Kim’s fault that people are overburdened with requests for “assistance” to help build the hospital. Lower-level bureaucrats have to be the ones to blame, for overburdening the people, because the leader can never be associated with direct pain and suffering in people’s daily lives.

In fact, such “assistance” – often termed “voluntary” – is a mainstay of the North Korean economic system and pretty much has been ever since the beginning. Kim surely cannot have missed the pictures and news reports in his own state media about “active support” from “the people”, and different localities sending construction materials. This sort of “voluntary labor” to gather materials for state projects or work on construction sites is of course not voluntary at all, as staying away would be punishable.

It is a facet of everyday life in North Korea that doesn’t get nearly the attention it deserves, as it often takes up a substantial number of hours. It is also not a new phenomena. The North Korean state has always demanded such “voluntary” contributions from the people to make up for materials and labor that the state cannot produce. Naturally, officials will use whatever means required to make their deliveries, even if these means are forcible. This applies to financial assets as well. The wealthier the trading middle class grows, the more the state will subject them to loyalty payments and the like.

In North Korea’s current situation, what choice does Kim really have but to blame lower officials for failures, and admonish them to do better? The Pyongyang General Hospital is not the only grandiose, heavily publicized project that is doing poorly. The Wonsan-Kalma resort has also been plagued by shortages and delays. The government needs these projects not least for propaganda value, to show to the country that although difficulties abound, all is not hopeless, the economy is still making progress, and people’s living standards will improve. So when none of the projects carrying this message are working out, the government has a problem.

In normal times, the state could have dismantled more economic regulations to make it easier for people to conduct trade and private economic activity. Indeed, though it is difficult to quantify, the state giving room for market mechanisms has been the most important factor for the significant improvements in the North Korean economy over the past few years.

Right now, this is difficult to do, because the state needs to extract more resources, not fewer. Over the past few years, the state has grown increasingly short of foreign currency and other assets, first because of sanctions, and later because of the Covid-19 border shutdown (which has partially ended). As a result, we’ve seen the state cracking down more and more on private business and market actors, to bring in resources as other avenues dry up.

The more difficult things get for the North Korean economy, the more demands increase for “loyalty payments” from private citizens, to fund the mega-projects that Kim has staked so much credibility on. We can expect to see more officials lose their jobs in the future in the same manner as those who got axed after Kim’s hospital construction field guidance.

 

*Such self-criticism does of course happen, but its rarity is attested to by the fact that it (rightfully) makes news headlines. One recent example is Kim Jong Un’s 2017 New Year’s Address.

 

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North Korea gearing up for hard times

Friday, July 10th, 2020

By: Benjamin Katzeff Silberstein

An editorial in today’s Rodong Sinmun emphasizes that fighting the “global pandemic” is more important than economic construction. For Korean-speaking readers, the message comes near the end of the editorial on Friday July 10th, and reads:

그것은 인민들의 생명과 건강을 보호하고 증진시키는것을 최급선무로, 가장 영예로운 혁명사업으로 간주하고있기때문이다.그 어떤 경제건설성과보다 대류행전염병의 침습을 막는것을 더 중요하게 여기고 이 사업에 최선을 기울여야 한다는것이 우리 당의 요구이다.

(Source: 김병진, “인민의 생명안전을 굳건히 지키는것은 우리 당의 제일중대사,” Rodong Sinmun, July 10th, 2020.)

This is not a new message, and it’s been re-stated in various forms in North Korean state media over the past few months. As I write in this article at 38 North, the recent emphasis on the chemical industry carries the same message: don’t expect any major changes in the external economic environment anytime soon, whether it be in conditions relating to sanctions or Covid-19.

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Trends in the time of Corona: North Koreans increasingly gifting each other cell phone minutes

Thursday, June 11th, 2020

Benjamin Katzeff Silberstein

Daily NK reports on an interesting trend:

North Koreans in Pyongyang are increasingly sending mobile phone minutes to others as gifts instead of attending birthdays or weddings as the country continues to restrict face-to-face meetings due to the COVID-19 pandemic.

“With restrictions on movement, events and meetings due to the coronavirus, it is becoming commonplace for people to send others ‘mobile money’ as a celebratory gift,” a source in Pyongyang told Daily NK on June 8.

“Mobile money” refers to a service where users can exchange minutes with other mobile phones users, essentially allowing people to “top-up” others who do not have enough minutes for voice calls.

“Students in Pyongyang who come from areas outside Pyongyang can’t return home due to the coronavirus and are unable to see their friends,” the source told Daily NK. “While confined in their dormitories, students began sending mobile money instead of gifts for various celebrations at home or their friends’ birthdays, and this practice is spreading to other areas of the country.”

AS SIMPLE AS CAN BE

Sending mobile money is relatively simple. Anyone with a mobile money card, which is akin to a checking card for mobile phone charges, can send minutes to others by entering the phone company’s three-digit ID number, the amount to be sent, the phone number of the recipient, and the six-digit password on the card.

For example, a subscriber of Koryolink, the most popular telecommunications provider in Pyongyang, can transmit mobile money to another individual by entering *999* followed by the amount of funds to be transferred, the phone number of the recipient, the six-digit phone money card password and then “#.” Kang Song NET customers would enter *929* instead of *999*.

(Source: Jang Seul Gi, “‘Mobile money’: an increasingly popular way of gifting to others,” Daily NK, June 11th, 2020.)

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Update on North Korea and Covid19: June 7th, 2020

Sunday, June 7th, 2020

By: Benjamin Katzeff Silberstein

A little over a week ago, I wrote an essay for Foreign Policy Research Institute about Covid-19 in North Korea. The long-term challenge of Covid-19, combined with sanctions, of course poses a major economic challenge for North Korea. However, as I attempt to lay out, there’s another issue. Much of Kim Jong-un’s legitimacy and policy focus has been tied up with economic construction and raising the people’s living standard. That looks like an increasingly distant prospect. With “just” sanctions, trade could have resumed and even expanded depending on the political moods in Beijing, and to a lesser extent, Moscow. Now with Covid-19, considerations are totally different:

Over the past few months, however, the tone of state rhetoric has changed. While before it breathed optimism, North Korean state propaganda now speaks much more—and more realistically—about problems and obstacles to economic development and about the old themes of autarky and economic self-reliance. For the time being, any plans to lift North Korea to a higher plane of economic development have largely been put on hold.

What does this mean politically for Kim Jong-un, who staked much of his credibility on delivering economic progress? The truth is that no one really knows. On the one hand, North Korea is perhaps the harshest dictatorship in the world, and the regime crushes even the slightest hint of dissent with an uncompromising iron fist. Over 100,000 people are estimated to be imprisoned in labor camps, many for crimes of political nature (or “speaking mistakes” as the Korean term goes), some for life. Kim Jong-un was in fact absent not just for one period of several weeks—the initial one that drew so much international attention—but for two different periods, and only appeared in North Korean media four times in all of April and May. Kim may be recovering from a medical procedure, but his absence may also be caused by caution against COVID-19. He may simply not want to conduct public visits or meeting sessions due to the risk of infection. In a system where so much power is centered around one single leader, his health is a top priority for national security in the eyes of the state, and will always be strongly guarded.

On the other hand, no dictatorship can truly function sustainably without any sense of at least tacit support from part of the population, such as the privileged, political core class. Kim has catered to this class in North Korea by overseeing their access to an essentially Western upper-middle class lifestyle in many respects, such as luxury department stores and a water park. The provinces have seen little of this development, and the massive and growing cleavage between the capital city and everywhere else is another long-term problem for the regime. Even so, life in the countryside has improved overall, albeit more marginally, thanks to the growth of the market system.

What happens when, over the course of a longer period of time, things not only cease to improve, but become markedly more difficult? The general public may heed the state’s call to get ready for some difficult times ahead for a while, but in the longer run, it may lead to widespread discontent. What that will mean for the North Korean regime, which has already survived challenges that seemed impossible, only time will tell.

(Full article here.)

In North Korea, it seems the regime is letting up on some of the strongest restrictions. For example, it will – and this says a great deal about the country’s complex economic system, where boundaries between illegal and legal trade are often unclear – “permit” smuggling to a greater extent:

North Korean authorities have decided to permit smuggling activities across some portions of the Sino-North Korean border from mid-June on the condition that smugglers pay foreign currency to purchase trade permits, Daily NK has learned.

According to a Daily NK source in North Korea on May 29, North Korea decided to allow traders in Sinuiju, Ryongchon, Uiju and Nampo Special City to conduct their activities from June 15. Traders who fall within the purview of the new measure include those working for trade companies affiliated with the military, Cabinet and other government agencies along with individual smugglers registered with companies.

WAKU BACK TO YOU

Traders must fulfill two conditions to restart their activities: 1) pay for their trade license (waku) in foreign currency; and, 2) in addition to their own imports, import items designated by the state and donate half of these imports to the government.

Even companies or individuals that already possess a waku must buy new permits with foreign currency because the permitted import lists on their trade permits must be changed to accommodate the import needs of the state.

North Korean authorities have reportedly ordered smugglers to include rice, flour, oil (cooking oil), sugar, MSG and other foods on their list of imports. Even traders who previously specialized in electric appliances or clothes must now include food items in their imports to be allowed to begin trading again.

The inclusion of these food items is likely the result of a measure handed down by the country’s Central Committee and Cabinet on Apr. 17 that restricted all “unnecessary” imports until the end of the year.

Following the announcement of the import restrictions, the prices of MSG, soybean oil and flour skyrocketed; there now appears to be great discontent among North Koreans about the scarcity of certain food products and the generally higher prices of food items. Daily NK’s source said that the addition of these food items to import lists is a direct result of this discontent.

North Korean officials have also announced that smugglers who hand over 70% of the food products – more than just the minimum of 50% – they import to the state will be given so-called “patriotic donation certificates.”

All in the all, the latest measure to open up smuggling across the border is aimed at both acquiring foreign currency (through the sale of trade permits) and stabilizing market prices by importing food items in demand.

UNEQUAL FOOTING

The decision to open up smuggling in certain areas is likely due to difficulties in controlling smuggling activities in places like Ryanggang Province and North Hamgyong Province.

Smugglers in those regions are reportedly faced with the significant burden of having to move their operations to North Pyongan Province or Nampo.

Moreover, they have to submit a “letter of intent” to a North Korean agency saying they will be importing items from a particular Chinese trader and the existence of these traders in China must be confirmed by the North Korean embassy in China. These traders also have to compete with traders already based in North Pyongan Province and develop trading routes from scratch.

Ryanggang Province-based traders have mixed opinions on the move to open up smuggling across the border. Some believe that they need to take the opportunity to start trade again, while others think they should wait until the authorities officially permit smuggling across the border in the province.

(Source: Jang Seul Gi, “N. Korea to permit smuggling over parts of Sino-NK border,” Daily NK, 1/6/2020.)

Meanwhile, schools are now open, with video clips to show it:

Schools in North Korea were supposed to start new semesters in early April, but the vacation period was extended repeatedly due to the coronavirus pandemic, though some colleges and high schools were allowed to open in mid-April.

In the footage, students were seen wearing masks, as were parents and teachers. Masks stayed on inside classrooms.

The resumption of schools might suggest concerns over the coronavirus have recently eased in North Korea or it could be aimed at projecting Pyongyang’s the country’s ability to contain the virus.

(Source: “N. Korean schools reopen during pandemic,” Yonhap, 3/6/2020.)

Meanwhile, news continue to come out of the country about deaths from symptoms similar to Covid-19, though of course, everything remains unconfirmed:

Dozens of people in two South Pyongan Province hospitals recently died after suffering symptoms similar to those caused by COVID-19 infections, Daily NK has learned.“The dozens of people who died recently were all patients at a facility caring for tuberculosis patients and the hepatitis care center at the Pyongsong City Hospital,” a source in South Pyongan Province told Daily NK on June 4.

The Pyongsong City Tuberculosis Care Center and the Hepatitis Care Center at the Pyongsong City Hospital are both focused on treating patients with infectious diseases. Patients in these facilities are typically discharged only after receiving permission from their doctors.

The patients who died were all being hospitalized for preexisting conditions, but expired while receiving intensive care after they began showing signs of COVID-19 infections.

Both hospitals quickly blamed tuberculosis or hepatitis for the deaths and hospital workers were ordered to stay silent about the dead patients, the source said.

The sudden spike in deaths led some patients in the hospitals to run away from the facilities out of fear of COVID-19.

“Groups of patients left the hospitals out of fear that they could die if they stayed there any longer,” the source told Daily NK, adding, “Local authorities along with hospital managers were alarmed by this.”

Local and hospital authorities were reportedly concerned that the runaway patients might infect broader society with their diseases.

Local rumors about the runaway patients reportedly focused on the reaction of the authorities, which suggested that officials are still concerned about COVID-19.

Late last month, public health authorities in South Pyongan Province reportedly conducted a province-wide survey of people who showed symptoms similar to those caused by COVID-19 infections.

According to the source, the survey found that there are around 1,500 people quarantined either at home or at medical facilities in the province after complaining of high fevers, coughing, difficulty breathing, and other symptoms. Most of them are self-quarantining at home, while only a few with severe symptoms are in medical facilities.

(Source: Jang Seul Gi, “Source: Dozens recently died at two Pyongsong hospitals,” Daily NK, 5/6/2020.)

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Rural provinces provide food and construction materials to Pyongyang General Hospital construction

Thursday, May 7th, 2020

By: Benjamin Katzeff Silberstein

To be fair, in theory, hospitals such as Pyongyang General Hospitals are supposed to provide care for rural residents with difficult medical problems too. That’s quite unlikely to happen, but still. It’ also essential to understand that this is how  the system is designed. North Korean media has publicized images of provincial localities “donating” construction materials for the hospital project. RFA:

North Korean residents are being forced to chip in with food aid for construction workers building a new hospital in Pyongyang, creating resentment among provincial residents who are not permitted to freely travel to the capital, sources in the country told RFA.

“Neighborhood watch units in each district of the province are holding meetings to discuss providing food to Pyongyang,” a resident of North Hamgyong province, who requested anonymity to speak freely, told RFA’s Korean Service.

“Regular events scheduled in March and April were all canceled [due to the coronavirus], but the neighborhood watch unit meetings go on as scheduled to solicit food aid for the construction workers in Pyongyang,” the source said.

Every neighborhood watch unit held such meetings on April 22, and the source attended one of them. “The meeting emphasized participation in the food aid campaign to complete the Pyongyang General Hospital as one of the nation’s top priorities,” the source said.

“As far as I know, these meetings to help out with Pyongyang’s food situation have been held in every neighborhood watch unit nationwide,” the source said.

According to the source, many of the provincial residents, who are themselves struggling to make ends meet due to COVID-19, resent that they are being asked to give to Pyongyang, a city where only the wealthy or well connected are granted permission to live.

“Some residents expressed their antipathy to the food aid request, asking why they must provide food for the Pyongyang General Hospital as it won’t even be usable by residents in the provinces,” the source said.

“In response, the neighborhood watch unit leaders argue that supporting the construction of the hospital is a top priority for the nation and has been ordered by the party amid a food situation that is bad all over the country,” said the source.

The watch leaders even went as far to say that the provincial people had it better than the privileged city-dwellers.

“They said that we have many ways to make money through our own businesses and side jobs, but Pyongyangers are tied to a very strict organizational lifestyle, so they have no means to get food or extra money,” the source said.

“In the end, the main point of the neighborhood watch meeting was that local residents should step up and feed Pyongyang because the situation in Pyongyang is difficult,” the source said.

Similar meetings were held in the North Hamgyong’s largest city Chongjin, according to another resident who also requested anonymity.

“[The meetings] are to force residents of the provinces, cities and counties all across the country to provide food aid for the construction workers at Pyongyang General Hospital,” the second source told RFA on April 28.

“The Supreme People’s Assembly is making each household give five kilograms (11 pounds) of rice or the equivalent in cash,” the second source said, adding, “The food situation is bad all over the place because of the coronavirus crisis, but I cannot understand how the people here in the provinces are supposed to feed Pyongyang.”

According to the second source, many of the residents were actually relieved when the coronavirus hit, because it meant they could get out of being mobilized for civic projects as happens every April.

“Just when we were relieved that there were no orders [to mobilize us] due to the coronavirus crisis, our moods soured when we were suddenly ordered to provide food for this construction site in Pyongyang.”

(Source and full article: Jieun Kim, Eugene Whong (transl.: Leejin Jun), “Rural North Koreans Forced to Provide Food Aid to Privileged Pyongyang,” Radio Free Asia, May 7th, 2020.)

For more on this, feel free to check out my recent 38 North article on health care in North Korea and the ongoing hospital construction.

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April 27th, 2020: Worrying signs of distress in the North Korean economy

Monday, April 27th, 2020

By: Benjamin Katzeff Silberstein

Readers of this blog know that market prices have risen over the past few weeks, largely as a result of North Korea’s anti-COVID19-measures. Over the past few weeks, however, other signs than market prices have surfaced that the economic situation may be getting more difficult, unrelated to Kim Jong-un’s health situation.

  • On April 17th, the Cabinet and WPK Central Committee reportedly announced a ban of all non-essential imports. The reason, ostensibly, is anti-COVID19-protections. One can also imagine it has to do with keeping the country’s hard currency base in place.
  • This measure, and perhaps combined with the overall mood, led to panic buying of import products in Pyongyang shops.
  • Prices on imported goods have increased drastically, Daily NK reports, with the price of imported soybean oil going from 45 RMB to 100 RMB for 5kg.
  • We should also view the issue of the public bonds in this context. In mid-April, the state issued public bonds which it ordered the bureau in charge of constructing the Pyongyang General Hospital to use to pay suppliers. This may be a sign that the state lacks cash of its own to fund the project, and it may expand the bonds issuing program. Moreover, the state may require entrepreneurs to purchase them. If the state begins exerting pressure on economic actors to purchase these bonds, such policies could become measures to essentially confiscate the assets of private economic actors, because the state lacks funds of its own.

Lots of uncertainties as always, but these trends are well-worth keeping an eye on.

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