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North Korea’s harvest numbers: what “food production” really means

Monday, March 11th, 2019

By Benjamin Katzeff Silberstein

I wrote about the confusing harvest numbers this past Friday, and I’ve been able to find little new information to make things clearer. Basically, the problem is that talking about “food production” is too vague, since that can mean a lot of different things. In the standard World Food Program/FAO crop assessments, there are usually two numbers quoted: one estimate for total production of food,  and one for “milled cereal equivalent”, a standardized measurement used to translate the varying nutritional contents of different crops into a standardized weight measure.* (See below for a more detailed explanation.) Basically, the “milled cereal equivalent” figure tends to be significantly smaller, by about 20 percent or so, than the original, total food production figure.

Since we don’t actually know exactly which number is being thrown around in analyses of the current harvest, I’ve calculated a possible milled-equivalent harvest figure, using the average difference between milled and unmilled for the years where I have the two different numbers from the WFP/FAO crop assessments. None of the historical estimates I’ve found correspond with the harvest numbers for previous years in the 2019 UN Needs and Priorities Plan. Crop production figures are usually given in terms of “marketing years”, not in calendar years. For simplicity’s sake, I denote each year by the second half of the marketing year, when most consumption will occur. So “2019” is the 2018/2019 marketing year, “2018” is the 2017/2018 marketing year, et cetera.

The following shows the scenario where the 4.95 million tonnes production figure is the “unmilled” cereal equivalent measure. Based on the average difference between milled and unmilled for the years where I’ve had data available from UN institutions (0.85 million tonnes), I’ve added and subtracted to complete the figures where necessary. This is not an exact, scientific way of looking at the harvest numbers. For exact accuracy, I’d need to calculate the milled cereal equivalent of each crop, something I don’t have time to do right now. This may well make the figure even lower. (Hazel Smith’s figure, for reference, is 3.2 million tonnes.) But the following does, at the very least, give a sense of the proportions at hand. And it makes the numbers look different from my initial assessment.

Food production, million tonnes (unmilled) Food production, million tonnes (milled)
2009.00 4.20 3.30
2010.00 5.17 4.32
2011.00 5.33 4.50
2012.00 5.50 4.66
2013.00 5.80 4.90
2014.00 5.98 5.03
2015.00 5.93 5.08
2016.00 5.92 5.07
2017.00 6.03 5.23
2018.00 5.75 5.00
2019.00 4.95 4.10

Table 1. Figures are sourced from various assessments by the WFP and FAO; contact me for exact sourcing on specific figures. 

Graphically, the trend in food production in milled terms, i.e. the lower-end, more realistic figure of how much food is available for consumption, using the above assumption for the 2019-figure, looks like this:

Graph 1. Estimate food production in North Korea, million tonnes, in milled cereal equivalent terms.

In short, this does give a rather grim and highly problematic food situation, putting the quantity of the harvest at 4.10 million tonnes. It puts North Korea back to a state of food production prior to 2010–2011, when harvest started to climb. And now, North Korea receives far less aid than it did a decade ago. Plus, its imports will only amount to 200,000 tons, the government seems to be saying, a similar amount to what it procured in imports and humanitarian aid in 2016/2017, when the harvest was much larger.

For long, this is how low North Korean harvests were. Only a few years ago, this would have looked like a rather solid harvest. Looking back in the future, it might turn out that the past few years of food production growth, since around 2011, was an abnormally good period of time. None of this means that this food situation is anything but poor.

To me, among the figures I’ve been able to find, it’s the only one that make sense in the context of the statement from UN representatives that this harvest was the worst “in a decade”. Hopefully things will become clearer over the coming days and weeks, as more information may be published, in which case I’ll update this post.

In sum, the actual food available in North Korea is, in all likelihood, much lower than the 4.95 million tonnes-figure quoted by the UN and the North Korean government. As the following graph shows, even using the North Korean government’s figures, the drop from last year doesn’t appear all that massive. But on closer inspection, the actual quantity of food available may be significantly lower than the figure the North Korean government states, as I’ve tried to show in this post.

Graph 2. Food production in North Korea, from the UN’s “2019 Needs and Priorities” report on North Korea.

Finally, a note on the issue of the markets and the public distribution system. I maintain that it’s impossible to get a sense of total food availability and circulation in North Korea as a whole, without taking the markets into account. According to most studies we have, the majority of North Korea’s population rely on these markets, rather than the public distribution system, for their sustenance.

But one has to acknowledge that just like the UN and North Korean government figures may not reflect the whole situation accurately, there may be a fair bit of bias in the data on the prevalence of the markets too. Most of this data comes from surveys done with defectors in South Korea. They overwhelmingly tend to come from the northern provinces of the country, closer to China, where market trade has traditionally been more prolific. Most sources for news from inside North Korea are based in the northern parts of the country, where one can get access to Chinese cell phone network coverage.

There’s likely another form of bias present in these surveys, too. Most people who are reliant on the PDS for their sustenance are likely underrepresented among defectors. People in state administration and security organs, for example, are less likely to leave North Korea, though that of course happens too. And in any case, we’re talking about a quite large demographic of people, whose livelihoods would be significantly impacted by cut rations. Such cuts are already happening, Daily NK reports, with some professional groups receiving only 60 percent of  what they otherwise would. The PDS may have changed shape and function quite drastically since the early 2000s, but it may also be more important to the North Korean public than the currently available survey data and reports from inside the country tells us.

Conclusion

North Korea’s food situation, though not at famine-time levels, does appear to be dire. The figures, in combination with reports from inside the country, gives serious cause for concern. Government numbers may not tell the full story since they likely underestimate the role of the markets. Nonetheless, things do look serious. The government could easily alleviate the situation by changing its spending priorities and policies. Chances are that it won’t.

Footnote:

*I’m borrowing here a footnote from a 38 North piece by the late scholar Randall Ireson, whose archive of articles remain one of the best sources for information on North Korean agriculture:

The FAO has consistently used grain equivalent (GE) values for the major crops to compensate for varying moisture and energy content. Thus, husked rice (GE) is .66 of the paddy weight, potatoes (GE) are .25 of the fresh weight, and soybean (GE) is 1.2 times the dry weight because of the high oil and thus calorie content.

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A few thoughts on North Korea’s harvest numbers

Friday, March 8th, 2019

By Benjamin Katzeff Silberstein

I unfortunately don’t have time to do as deep of a dive into the different numbers going around on North Korea’s harvest as I’d like, but a few short thoughts:

  • The numbers are confusing, because there’s a whole bunch of different ones being cited. The UN (citing North Korean government figures) puts the harvest at 4.95 million tonnes, while Hazel Smith cites 3.2 million tonnes. I suspect that part of what’s going on is that some figures refer to total food production estimates, while others refer to the milled cereal equivalent, the most common measurement for actual food availability by international humanitarian organizations. But that can’t explain the full difference at play here since it’s simply too large. (For reference, see this WFP-report from 2010.)
  • The vast differences in numbers cited is a big impediment to really getting a grasp of how bad the situation seems to be. If the 4.95 million tonnes-figure refers to unmilled cereal production, it represents a significant drop from the past few years, but not one that would necessarily indicate a return to the famine-level supplies of the 1990s. If it refers to milled cereal equivalent numbers, which I don’t believe it does, it’s not that bad (milled equivalent production was reported at 4.48 million tonnes for 2011).
  • The reason that many may be suspicious about the claims of a bad harvest being exaggerated, is that it is an historical pattern on the part of the DPRK government. That doesn’t mean that this time isn’t different. The past may be a good indicator for the future, but it’s never proof.
  • No serious assessment can be fully trusted as long as it fails to take the market system into account. That the UN is unable to survey and study food supply from the markets, and their contribution to resiliency in food supply, is a massive problem. That’s surely not for a lack of attempts on the part of the WFP and other organs to get to visit markets. I’m sure they repeatedly press the North Korean government on this, thus far, to my knowledge, to little avail. Still, the magnitude of the drop in the production estimate still likely says something about the magnitude and direction of the dynamics of change on the markets as well.
  • Lastly, regardless of how things stand, North Korea’s humanitarian situation is precarious and very bad. While Kim Jong-un has spent much of his tenure cutting ribbons at avenue renovations in Pyongyang, the population in almost half of the country’s provinces are estimated to lack access safe drinking water. This is a matter of priorities on the part of the government. In any case, for the purposes of humanitarian aid, in the immediate term, it doesn’t really matter whose fault the situation is. My skepticism of the numbers should not be taken as arguing that North Korean civilians shouldn’t receive aid; the humanitarian situation in the country, particularly in the souther provinces, is almost certainly more or less constantly bad enough to warrant it. This paragraph from Hazel Smith’s recent PacNet piece is particularly chilling, if these numbers are accurate:

The starkest confirmation of a catastrophic harvest in 2018 is the precipitous drop in output from the big food producing provinces. Between 2016 and 2018, South Hwanghae, the ‘granary’ of North Korea, had a 5 percent reduction in area planted but an enormous 30 percent decrease in output – with a 19 percent drop in agricultural output between 2017 and 2018.

 

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North Korea’s 2018/2019 harvest and food shortage

Thursday, March 7th, 2019

By Benjamin Katzeff Silberstein

The UN has officially compiled and published the estimated harvest figure for North Korea during the 2018/2019 marketing year, and as we already knew, it lands at 4.95 million tonnes. AFP:

North Korea recorded its worst harvest for more than a decade last year, the United Nations said Wednesday (Mar 6), as natural disasters combined with its lack of arable land and inefficient agriculture to hit production.

The isolated North, which is under several sets of sanctions over its nuclear weapon and ballistic missile programmes, has long struggled to feed itself and suffers chronic food shortages.

But last year’s harvest was just 4.95 million tonnes, the United Nations said in its Needs and Priorities assessment for 2019, down by 500,000 tonnes.

It was “the lowest production in more than a decade”, the UN’s Resident Coordinator in the North Tapan Mishra said in a statement.

“This has resulted in a significant food gap.”

As a result 10.9 million people in the North needed humanitarian assistance – 600,000 more than last year – with a potential for increased malnutrition and illness.

It is equivalent to 43 per cent of the population.

But while the number of people needing help rose, the UN has had to cut its target for people to help – from 6.0 million to 3.8 million – in the face of a lack of funding.

Only 24 per cent of last year’s appeal was met, with Mishra describing it as “one of the lowest funded humanitarian plans in the world”.

Several agencies had been forced to scale back their programmes and some faced closing projects, he said, appealing to donors to “not let political considerations get in the way of addressing humanitarian need”.

“The human cost of our inability to respond is unmeasurable,” he said, adding that sanctions had created unintended delays and challenges to humanitarian programmes, even though they are exempt under UN Security Council resolutions.

[…]

It was hit by a heatwave in July and August last year, followed by heavy rains and flash floods from Typhoon Soulik. As a result, the UN said, rice and wheat crops were down 12 to 14 per cent.

The figure is significantly larger than in the South, where rice production was down only 2.6 per cent last year, according to Seoul’s statistics, even though it experiences similar weather and climate.

The North’s soybean output slumped 39 per cent and production of potatoes – promoted by leader Kim as a way to increase supplies – was 34 per cent down, the UN said.

Last month Pyongyang told the UN that it was facing a shortfall of 1.4 million tonnes of food this year.

Full article and source:
North Korea food production ‘lowest for a decade’: UN
AFP
2019-03-06

A few thoughts on this:

The UN figures must have been updated and adjusted over the past few years, because according to the data I have at hand, 4.95 million tonnes is not nearly the worst production figure in a decade. I’m assuming that the 4.95-figure refers to the “milled tonnes equivalent” number. According to the World Food Program’s November 2011 estimate, for example, the equivalent figure for 2011/2012 was 4.66 million tonnes. But again, the numbers might have been adjusted since they were first calculated.

Like I wrote a few weeks ago, there is little to suggest a true food emergency of massive proportions. Market prices for rice, for example, have barely moved over the past few weeks, and are actually down quite a bit in the latest observation, from 4,600–4,870, to 4,200–4,210 won/kg. This might not mean much, but still, these prices tell us something. Usually, prices seem to only climb in reaction to shortages as the market gets closer to the next harvest season, and food availability becomes increasingly scarce. Expectations aren’t easy to calculate or project. It may be that the market as such isn’t even fully aware of the shortages.

While current prices alone aren’t necessarily a sufficiently certain indicator of the food situation, however, were the situation completely disastrous, we should have seen prices rise already, as farmers and others hoard grains to store up for worse times to come. Instead, prices remain stabile.

Again, that’s not to say that things aren’t bad. A ten percent decrease in the harvest, even though not disastrous, is still a notable decrease. The view from the ground in North Korea seems to unequivocally be that yes,  this year’s harvest is much worse than those of the past few years, mainly due to the dry, hot weather in the summer and fall of last year. News outlets with sources inside North Korea, such as Daily NK, have also reported – independently of the North Korean government, unlike the UN – that harvests have been notably poor.

Conditions also vary a lot between different regions and socio-economic groups. Though there’s been no wide-spread starvation in North Korea since the early 2000s, some particularly vulnerable groups do likely rely on humanitarian assistance for their sustenance.

It really is striking and strikingly problematic how little we know though. The fact that the international community isn’t even allowed to monitor the markets, the most important source of sustenance for most North Koreans, is problematic. To my knowledge, international humanitarian organizations are not allowed to survey the market system in any comprehensive way.

There’s also an important overarching question we should be asking: what about the long term? Food insecurity in North Korea did not arise with “maximum pressure” or the sanctions. It’s been a fact since the late 1980s. Humanitarian international institutions are,  I am sure, doing their best. Hopefully, they continuously to ask North Korean regime representatives what institutional, systemic changes the government is undertaking to alleviate the problem. Giving humanitarian aid without making demands for systemic change would be to let down the people in greatest need of help.

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Is North Korea’s food situation as bad as the government says? Probably not.

Friday, February 22nd, 2019

By Benjamin Katzeff Silberstein

(Updated 27/2: see below for clarification on the nature of the North Korean memo; the appeal was never meant to be publicized. Another minor clarification below done on 11/3.)

During the past week, both the UN and the North Korean government has made claims that its food situation is bad enough for the country to need international emergency aid. AP:

U.N. spokesman Stephane Dujarric said Thursday that food production figures provided by North Korea show “there is a food gap of about 1.4 million tons expected for 2019, and that’s crops including rice, wheat, potato and soybeans.”

Dujarric says the U.N. has “expressed and will continue to express our concern about the deteriorating food security situation” in North Korea.

He says the U.N. “at various levels” is consulting with the North Korean government “to further understand the impact of food security on the most vulnerable people, in order to take early action to address the humanitarian needs.”

A few days ago, North Korea’s UN ambassador distributed a memo (presumably to UN officials) saying that because of sanctions and unusually warm and dry weather last summer, this year’s harvest was worse than expected. NBC reported some of the contents:

Kim’s claims are difficult to verify, and his government has not always been a reliable source of internal statistics. He said a food assessment, conducted late last year in conjunction with the UN’s World Food Program, found that the country produced 503,000 fewer tons of food than in 2017 due to record high temperatures, drought, heavy rainfall and — in an unexpected admission — sanctions.

The food agency could not immediately confirm that the organization conducted an assessment with North Korea or the conclusions the country shared in the memo.

In a plea for food assistance from international organizations, however, the memo states that sanctions “restricting the delivery of farming materials in need is another major reason” the country faces shortages that has forced it to cut “food rations per capita for a family of blue or white collar workers” from 550 grams to 300 grams in January.

“All in all, it vindicates that humanitarian assistance from the UN agencies is terribly politicized and how barbaric and inhuman sanctions are,” the memo says.

The memo is worth reading in its entirety.

There are a lot of things that are strange about this memo and its contents. I’ll try to deal with as many of them as possible here. But first: how bad is the food situation, really?

This question is virtually impossible to answer accurately, because no one really knows how much food is being produced in North Korea. The World Food Program that works with the North Korean government to estimate harvest yields does what it can under difficult circumstances to accurately measure harvest yields in the country. But these measurements are severely restricted by the fact that much of food supply and production in North Korea still completely lacks transparency. For one, we know that most citizens get the majority of their food through state-administered private markets.

International agencies, however, still cannot survey these markets or study their role in food provision, because the government’s attitude to the market’s very existence remains somewhat ambivalent. The crop surveys conducted with the North Korean government simply cannot answer how much food is available throughout the system, because the markets, the most important node, cannot be assessed and studied accurately. Surveying the markets would let the WFP study the situation in its entirety,  since that way, they could take into account both imports, private plot farming, and the like.

But taking the numbers provided by North Korea and the UN at face value, it’s clear that if these numbers reflect reality, domestic food production is down since the past couple of years, but not by disastrous amounts. There’s no second “arduous march” lurking behind the corner, judging from these figures. In fact, harvests have been growing for several years, largely thanks to changes in agricultural management under Kim Jong-un.

Food production in North Korea, in millions of tons. Harvest data is usually given in “marketing years”; figures here partially based on full-year estimates earlier in the respective year. Data source: World Food Program/Food and Agriculture Organization. Graph by North Korean Economy Watch.

Moreover, and perhaps most importantly, market prices for rice have remained stabile. So the markets don’t seem to think there really is a true food shortage coming, even though things do seem to have gotten more difficult due to the drought. I cover this in more detail in this post, but the following graph speaks its clear language.

Average rice price for three North Korean cities, spring of 2017–early 2019. Data source: Daily NK.

At the very least,  had there been major signs of stark shortages, it would have been visible in the price data. Reports from North Korea do confirm that food production seems to be down overall, but remember, that’s from a fairly high level and after several years of increases. Over the past few years, the North Korean government and UN agencies have made similar appeals, but in the end, fortunately, no major crises seem to happen.

The strangest part about the North Korean memo is that it speaks of reduced rations of grains to  “a family of blue or white collar workers” as a result of the drought  and  sanctions. The thing is, only relatively few people and almost no civilians in North Korea actually get  their food through these government rations. The Public Distribution System (PDS, or 식량배급제도) essentially only operates for the military, shock work brigades (돌격대), and within the judicial administration (more accurate would be to say “government administration”; this is a rather nebulous category in North Korea, including large numbers of civil servants within both the central state, local government level, and policing organs). So this “white or blue collar worker” likely wouldn’t necessarily get her or his rations anyway. As far as we know, they’d go and buy their food at the market with cash instead, in most cases.

It’s often believed that North Korea doesn’t admit weaknesses such as food shortages out of political principle, but over the past few years, the government have been very public with claims of shortages on the horizon, and in asking for aid. Not because the state can’t afford to compensate for the shortfall, but because it simply has other priorities.

Reading the North Korean memo, it’s easy to suspect a connection with next week’s summit in Hanoi and the sanctions situation. By getting news stories out that civilians are starving because of sanctions – a highly questionable claim of causality – the North Korean government may be trying to create more bad press for the sanctions as such.* How can the US argue that they should be preserved, if they’re even preventing North Koreans from getting access to food? There are certainly troubling humanitarian aspects of the sanctions, but it’s difficult to imagine how they could have directly caused the harvest to dwindle.

None of this is to say that North Korea shouldn’t get food aid, that’s a different question. But the government’s basis for the appeal is rather dubious, to say the least. Hopefully, one day international humanitarian agencies will have good enough access to actually get to evaluate the country’s food situation, without constraints.

*Apparently, the memo from North Korea’s UN ambassador was leaked, not intentionally distributed. A person with insight into the issue and appeals process tells me the appeal was never meant to be publicized. This makes my interpretation above far less likely, though the direct impacts of sanctions on the harvest is still questionable.

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North Korea’s puzzling maternal mortality figures

Monday, February 4th, 2019

By Benjamin Katzeff Silberstein

South Korea’s Institute for Health and Social Affairs, using data from the UN Population Fund, claims that maternal mortality in North Korea has increased in the past few years, since 2008. (This was reported back in November of last year, but for some reason I only stumbled upon the article now.) I don’t have time to check out the data or the original source in question right now, but hope to later. It may well be Yonhap’s reporting that is off, because something sounds odd here (my emphasis in bold):

Amid the prolonged international sanctions on North Korea, the health of the North’s infants and pregnant women is in a very vulnerable state, a South Korean government think tank said Tuesday.

The Seoul-based Korea Institute for Health and Social Affairs said in a report that North Korea’s maternal mortality rate was 82 per 100,000 newborns, about eight times higher than the rate of 11 in South Korea, based on the United Nations Population Fund’s 2017 World Population Survey.

Of course sanctions likely have some degree of detrimental impact on the humanitarian situation in North Korea. But to blame current sanctions for what the situation looked like in 2017 – when most of the most effective, hard-hitting ones had just been put in place (or were not yet in place depending on when these measurements were done) is simply inaccurate.

The North’s maternal mortality rate marked a rise from 77.2 persons in 2008, the report noted. Maternal mortality rate refers to the proportion of women who die of pregnancy-related illness during or immediately after childbirth.

Source:
Report shows deteriorating health of N. Korean infants, mothers
Yonhap News
2018-11-20

It is surprising that data would show North Korea’s health situation declining from 2008 and nine years ahead, but there is actually quite a bit of other data, albeit from similar sources, saying the same thing. Again, I hope to take a closer look at some of this data soon, but for now, I’d say there are two possible conclusions one can draw from these figures.

The data may look this way because measurement methods and access got better, not because things on the ground actually got worse. UN institutions have gotten somewhat better access, in my understanding, since the earlier 2000s, and are able to survey places that could not be visited before. These may be localities where things are simply worse than in others, which may be why the government didn’t want to grant access in the past, leading to figures that are more accurate, but also show a trend that may not be consistent with reality.

The other alternative is that the recovery from the famine period, and economic growth of the past few years, has not been as consistent as often believed. (Update 5/2: It’s also possible that there simply hasn’t been any consistent path of recovery, but rather, that many indicators first improved vastly from the 1990s and early 2000s, only to decline again after a few years of an upward trend). Conditions are generally believed to have improved in the country as a whole over the past few years, and there is very little data to suggest otherwise. Institutional change combined with increased exports of natural resources, has spurred some degree of growth in the North Korean economy over the past few years, but we know fairly little about the degree to which different demographics of the population have actually seen their conditions improve. If maternal mortality has gone up while North Korea’s incomes from foreign trade have skyrocketed in relative terms, that would tell us something important about the distribution of economic gains.

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Does North Korea need to import 641,000 tons of grain, like the UN says?

Wednesday, December 12th, 2018

By Benjamin Katzeff Silberstein

That’s what the FAO says in a recent estimate. Here’s the Yonhap summary of the FAO report:

North Korea requires about 641,000 tons of grain this year as the impoverished communist nation produced a below-average yield, a U.N. food agency said in a recent report.

This would not be prohibitively expensive for the government to import.

The shortfall, which must be made up with foreign assistance and imports, is up from 458,000 tons estimated for 2017 in the quarterly Crop Prospects and Food Situation report released by the Food and Agriculture Organization of the United Nations.

Full article:
N. Korea needs 641,000 tons of grain: U.N. report
Yonhap News
2018-12-12

I have my doubts about the accuracy of these estimates. It’s highly unclear how the Food and Agriculture Organization (FAO) has conducted any recent food production surveys in North Korea to generate these new figures. Even when they did  such surveys on a regular basis, conditions were difficult as they were (at least to my knowledge) not able to freely visit farms and markets. The role of the markets in agricultural distribution is still not fully or officially acknowledged by the North Korean government. I’ve emailed FAO with questions about the basis for these numbers, and will update the post if or when they respond.

The problem is that the marketization of food supply makes it very difficult to create an accurate balance sheet for food needs and production. We don’t know precisely how much private plots produce, for example, or how much is imported outside of what the government reports to FAO. Again, all of this would be much easier to understand if more information was readily available about the FAO’s methods for this estimate.

Here is the actual report by FAO. You can find previous reports here.

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North Korea’s aid needs next year, same as this year?

Wednesday, December 5th, 2018

By Benjamin Katzeff Silberstein

Yonhap reports:

More than US$111 million will be needed for humanitarian assistance to North Korea next year amid international sanctions on the impoverished country, a U.N. report showed Wednesday.

The amount is similar to this year’s level targeted for 6 million people, according to the Global Humanitarian Overview 2019 released by the United Nations Office for the Coordination of Humanitarian Affairs.

While the number of people in need is expected to remain similar next year, sanctions imposed on North Korea will continue to constrain U.N. agencies and other humanitarian partners from providing assistance to the impoverished country, the paper said.

A total of 10.3 million people were estimated to be in need of humanitarian aid in North Korea in 2018, it said.

“While international sanctions clearly exempt humanitarian activities, they have unintentionally impacted humanitarian operations through a disruption of the banking channel, breakdown in supply chains and delays in transporting vital goods into the country,” the report said.

The funding for humanitarian aid to North Korea has decreased from $400 million in 2004 to $26.2 million as of November 2018, it said.

Article source:
U.N. says over US$111 mln required for humanitarian aid to N.K. next year
Yonhap News
2018-12-05

For the record: this is money that the North Korean regime has, but chooses not to spend on humanitarian needs.

It appears that the calculation of North Korea’s needs next year isn’t really a calculation, but just an assumption that conditions and needs will remain the same for the foreseeable future. This makes the estimate rather lacking in credibility, but given the strongly restricted access for humanitarian agencies to North Korea, they likely have little other choice but to repeat the most recent estimate.

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Humanitarian aid, luxury goods and aid diversion in North Korea

Monday, October 29th, 2018

By Benjamin Katzeff Silberstein 

North Korea imported luxury goods from China for at least $640 million, says one South Korean lawmaker. Reuters:

“Kim has bought lavish items from China and other places like a seaplane for not only his own family, and also expensive musical instruments, high-quality TVs, sedans, liquor, watches and fur as gifts for the elites who prop up his regime,” opposition lawmaker Yoon Sang-hyun said in a statement.

“With the growing loophole, Kim would be able to near his goal of neutralizing sanctions soon without giving up the nuclear weapons.”

Last year, North Korea spent at least $640 million on luxury goods from China, according to Yoon.

China does not provide breakdowns of its customs figures. Yoon compiled data based on a list of banned items crafted by Seoul in line with a 2009 U.N. resolution.

Beijing’s customs agency did not immediately respond to a request for comment. Beijing has said it strictly abides by international sanctions against North Korea.

The 2017 luxury trade volume was down from the 2014 peak of $800 million, but was only a 3.8 percent drop from $666.4 million in 2016, according to Yoon.

The luxury items accounted for 17.8 percent of North Korea’s entire imports from China last year which totaled $3.7 billion, Yoon said.

Purchases of electronic products such as high-end TVs made up for more than half of the total transactions, worth $340 million, followed by cars with $204 million and liquors with $35 million.

China’s trade with North Korea from January to August this year tumbled 57.8 percent from the year-earlier figure to $1.51 billion, China’s customs agency said last month.

But Yoon’s analysis also shows North Korea funneled more than $4 billion into luxury shopping in China since Kim took power at the end of 2011.

Yoon accused China of loosening enforcement of sanctions, and criticized South Korea’s recent request for U.N. and U.S. exemptions to restart inter-Korean economic cooperation.

Full article:
North Korea bought at least $640 million in luxury goods from China in 2017, South Korea lawmaker says
Hyonhee Shin
Reuters
2018-10-22

Now, none of this means that Kim Jong-un is personally swimming in a sea of handbags and TV-sets in Pyongyang. Rather, it means that North Korea – whether semi-private companies or state entities – has imported a fair amount of so-called luxury goods, despite sanctions that should prevent such imports. The term “luxury goods”, moreover, is too broad in this case and encompasses several items that wouldn’t necessarily be classified as “luxurious” by most.

At the same time, UN institutions estimate that 1/4 of children in rural North Korea are underweight. As Chosun Ilbo reports:

The wealth gap between country and city is widening. One in every four rural children is undernourished and underweight and the North has the most serious poverty issue in East Asia, the FAO said.

The wealth gap between country and city is widening. One in every four rural children is undernourished and underweight and the North has the most serious poverty issue in East Asia, the FAO said.

The proportion of underweight children in rural areas is 27 percent but only 13 percent in the cities.

Full article:
1/4 of Rural Kids in N.Korea Underweight
Kim Myong-song
Chosun Ilbo
2018-10-18

The World Food Program (WFP), meanwhile, has only received 27 percent of their funding appeal for 2018:

According to Herve Verhoosel, a spokesperson for the World Food Programme (WFP), the UN agency is staring at a massive 73 per cent shortfall in funding for 2018, hurting critical programmes such as nutritional support for children.

“We must not wait for diplomatic progress to alleviate the suffering of millions of people – funds are urgently needed now,” said Mr. Verhoosel.

“Any donation we receive today will take at least six months to reach the people who need it, due to the time it takes to purchase and transport food.”

A lack of funding risks reversing small gains in nutrition for mothers and children, made over the past four years, on the back of concerted efforts by humanitarians. Limited funding has also resulted in the suspension of operations to build resilience among disaster-hit and vulnerable communities.

WFP needs $15.2 million over the next five months to avoid further cuts to programmes which help feed around 650,000 women and children each month.

Across the country, which is officially known as the Democratic People’s Republic of Korea (DPRK), more than 10 million people – almost 40 per cent of the population – are undernourished and in need of support, with one in five children stunted due to chronic malnutrition.

The country is also vulnerable to natural disasters, such as drought and flooding, which affect agricultural production and livelihoods.

Article source:
Critical food programmes in North Korea can’t wait for ‘diplomatic progress’, UN food agency warns
UN News
2018-10-09

So, what is really going on here? Is it accurate to say, like the headlines imply, that North Korea’s leadership is simply buying a bunch of luxury items for millions of dollars and letting children starve in the countryside? Is there a real risk that humanitarian aid can be diverted to the army, and what does this really mean? These are separate questions, but they are interrelated in the sense that they all touch upon Pyongyang’s incentives and policy choices when it comes to its humanitarian situation.

On 38 North, the host website of this blog, Kee Park and Eliana Kim show convincingly that the fear of diversion of aid to the military is exaggerated and unfounded:

International donors and organizations have become increasingly reluctant to provide funds to North Korea. Although five countries—Switzerland, Sweden, Canada, France and Russia—have responded to the UN’s request this year, there is still a funding gap of $88.1 million. Previous donors such as United Kingdom, Australia, Japan, Ireland, South Korea and others remain uncommitted. One concern frequently cited for this reluctance is that foreign aid, including critical humanitarian aid, will either be diverted to the military or fund the nuclear weapons and missile programs or take pressure off of the regime to provide for its people.

However, these concerns are based on basic misunderstandings of how and why humanitarian assistance is provided to North Korea. Facts on the ground show that the potential for diversion is minimal and the main benefactors are generally not government or military institutions. Given the mission of UN humanitarian assistance, denying the DPRK this assistance for political purposes is both unethical and inhumane.

Full article:
The Case for Funding the UN’s Request for Humanitarian Assistance to the DPRK
Kee B. Park and Eliana E. Kim
38 North
2018-10-23

One of their most central arguments is that opportunities for diversion are too small to be meaningful. Overhead costs only make up a small percentage of total costs, and little of it could even hypothetically be diverted given that it’s all needed to run UN operations in the country. When it comes to diversion of actual food aid, the authors argue that most diversion that may occur is done towards the markets – that is, the state doesn’t actually take foodstuffs for its own use, and resources that are used elsewhere do not necessarily benefit the North Korean government.

It also seems like diversion was much more of a real concern in the 1990s and early 2000s. The worry was primarily about diversion of food aid to the military and away from society’s most needy, and it wasn’t unfounded at all.  But we have to assume that there’s been a great deal of learning done by NGOs and international institutions present on the ground. They know what they’re doing.

Today,  food aid volumes aren’t large enough to be meaningful for the army to try to divert, it seems, even if they would want to. Much of the aid, moreover, consists not of rice and other goods consumed by the general public, but likely of nutritional assistance designed to maximize the caloric intake of vulnerable groups such as children and breastfeeding mothers. We also have to remember that the chain of aid distribution and reception is long and diverse. Park and Kim argue that Pyongyang has invested much more in recent years to meet humanitarian needs. I would add that people who have worked with humanitarian aid delivery on the ground have often commented on how local officials and staff members, regardless of what one might think of Pyongyang’s intentions, are often passionate and genuine in their will and hard work to ensure that food aid reaches their local constituents and intended recipients.

However, this angle misses an important point. Diversion isn’t just about the army grabbing bags of rice intended for malnourished children, it’s also, arguably, about resources in the bigger picture. At the end of the day,  for the North Korean regime, feeding the most vulnerable is a matter of priority. We know it could, should it choose to do so. Even in years when North Korean harvests have likely been lower than this year (which we don’t yet have figures for) given the upward  trend in harvests over the past few years, the deficit left between domestic production and projected need wouldn’t have been that expensive to make up for.

Enter the luxury goods. We don’t know what proportion of the $640 million represent purchases strictly made by the state, and not by individual North Koreans or private enterprises. (The lines in this realm are rarely clear-cut.) But even low-balling it and assuming that only 1/6 is bought by the government to supply Kim Jong-un’s court and patronage networks, that’s still more than what would have been required in food imports to meet the estimated needs of the population in 2012, when, again, production was probably even lower than it is today. The UN appeal of $111 million of this year is also roughly equivalent to 1/6 of North Korea’s estimated “luxury” goods import of the past year.

And that’s just using luxury goods as an illustrative example. We could also look at any one of the massive infrastructure investments by Kim Jong-un and the renovations and new constructions of entire city blocks and streets in Pyongyang, or loft projects such as the Masikryong Ski Resort. The point is that North Korea surely has the funds to cover the humanitarian needs of the most vulnerable among its population, but chooses not to and instead counts on the UN to foot the bill for doing so. A form of “diversion”, if you will.

This is not to argue either for or against giving humanitarian aid. That the regime makes certain policy choices seems a morally problematic argument for not funding humanitarian needs. But in the long run, especially as North Korea’s economic health improves, one has to wonder whether it’s sensible for the international community to keep paying for humanitarian needs in a country whose regime could afford to do so, but makes a different policy choice, year after year.

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Posted in Agriculture, International Aid, UN, UN Food and Agriculture Organization, UN World Food Program, Uncategorized | Comments Closed

Russia wants sanctions on North Korea to ease

Thursday, September 27th, 2018

Benjamin Katzeff Silberstein

I don’t think we have systematic, rigid data enough to prove that Russian sanctions implementation overall on North Korea has eased even though the Russian government’s line on easing international sanctions has gone on consistently for months. But still, it’s only logical that a government working for sanctions pressure to ease would at the very least make sanctions implementation oversight and rigor less of a priority. Wall Street Journal:

Mr. Pompeo used his opening address to swipe at permanent Security Council members Russia and China for violating U.N. sanctions involving the sale of petroleum products in excess of North Korea’s maximum 500,000-barrel allowance and for providing other forms of economic relief.

“The members of this Council must set the example on that effort, and we must all hold each other accountable,” Mr. Pompeo said, calling for an end of ship-to-ship transfers of petroleum products, linked to Chinese and Russian entities, and a halt to hosting of North Korean laborers, a reference to the thousands of workers who have been granted permission to work in Russia.

“This violates the spirit and the letter of the Security Council resolutions that we all agreed to uphold,” he told the Council.

Mr. Lavrov used his address to bash the U.S. and its allies for exerting excessive pressure on North Korea, saying it was unacceptable for sanctions to be used as a form of “collective punishment.”

Mr. Lavrov defended North Korea’s call for economic relief, saying Pyongyang has taken meaningful steps toward implementing its promise to give up its nuclear weapons and urged the U.N. Security Council to send a “positive signal” in return.

“Negotiations are a two-way street,” Mr. Lavrov said, adding that Russia would draft a proposal to allow certain economic projects in North Korea to be exempt from sanctions.

Mr. Lavrov said such projects would be in the interest of all parties and would ease the “extreme socioeconomic and humanitarian suffering” caused by the sweeping sanctions regime currently in place. He also took aim at the U.S. for implementing secondary sanctions, which he described as “illicit practices” that undermine the sovereignty of other nations.

It’ll be interesting to see what these economic projects are specifically. My bet is on infrastructure and railway renovations and possibly new construction,  or perhaps ones centering around the Rason port and special economic zone.

Full article:
Russia’s Lavrov Calls for U.N. to Ease North Korea Sanctions
Jessica Donati
Wall Street Journal
2018-09-27

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Posted in International Aid, International trade, Russia | Comments Closed

Moon: North Korea wants to join international financial institutions

Wednesday, September 26th, 2018

Benjamin Katzeff Silberstein

NK News reports some of the comments that Kim Jong-un made to Moon Jae-in on the topic:

Speaking at a discussion hosted by the Council on Foreign Relations (CFR), the Asia Society Policy Institute, and Korea Society, Moon said Seoul plans to support the DPRK’s national economic development should sanctions be lifted following “substantive denuclearization.”

“South Korea intends to take the initiative in putting its weight behind the North Korean economic development, including in the construction of infrastructure,” the South Korean President said. “I believe that will also provide fresh vitality and growth for the South Korean economy.”

The South Korean President said, however, that there would be “a number of limitations” should Seoul work to help Pyongyang’s national economic development, stressing the necessity for support from international financial institutions.

“I think international funds supporting North Korea’s infrastructure will need to be created,” Moon added. “Other international agencies including the WB (World Bank), the World Economic Forum, and the Asian Development Bank should aid North Korea.”

Pyongyang is willing to accept support from international organizations, Moon said, including the International Monetary Fund (IMF).

“I’ve confirmed that the North Korean side has the will to engage in reform and opening by joining several international organizations such as IMF and World Bank,” he said.

South Korean finance minister Kim Dong-yeon in May announced that Seoul was seeking shortcuts to allow North Korea to receive funding and support from International Financial Institutions (IFIs), including the European Bank for Reconstruction and Development (EBRD).

Full article:

North Korea wants to join IMF and World Bank, pursue economic reform: Moon
Dagyum Ji
NK News
2018-09-26

As I’ve written about elsewhere, North Korea joining the IMF and/or the World Bank would entail a number of structural reforms that should, at least in theory, improve the health of the economy. The requirements to improve transparency in economic data would also be crucial, not just for those outside of North Korea interested in its economic situation, but also for the North Korean government itself, which likely does not have a very full picture of many of the most important economic indicators in the economy.

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Posted in Economic reform, IMF/World Bank, International Aid, Statistics | Comments Closed

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