Agriculture « North Korean Economy Watch

Archive for the ‘Agriculture’ Category

Aid Strengthens Kim’s Regime

Thursday, December 1st, 2005

Nautilus Institute
Andrei Lankov
12/1/2005

The recent news out of North Korea leaves no room for doubt. After a decade of grudgingly allowing small-scale free markets, Kim Jong Il’s regime is seeking to reimpose total control. Ironically this turning back of the clock is being aided by the “no strings attached” aid policies of two countries, China and South Korea, which claim to be trying to encourage reforms.

From early October, all trade in grain has been forbidden in the small private markets that mushroomed across North Korea when the state-run food distribution system largely collapsed during the famine of the 1990s. North Koreans are now expected to rely on a revived public distribution system for supplies of grain. Special teams of officials have fanned out to check farming households for any “excessive” supplies of grain they might try to sell in the private markets, and ensure they are left only with their officially allowed ration of 700 grams a day.

Internal travel controls are also being tightened. During the famine, authorities turned a blind eye to violations of the regime’s tough restrictions on freedom of movement, as starving North Koreans crisscrossed the country in search of food. Now these are being enforced once again, with North Koreans required to obtain a travel permit from police before they can travel elsewhere in the country.

Pyongyang’s moves in this direction should not come as a surprise. Allowing even a minimal degree of private enterprise reduces the regime’s absolute control over its citizens — especially if they are no longer dependent on the state for their food — and provides firsthand evidence of the existence of a more successful economic system. The Kim regime has seen how economic reform preceded the collapse of Communist regimes across Eastern Europe. It’s no coincidence that one of the questions most commonly heard in private conversations with members of the Pyongyang elite these days is about the fate of Communist cadres in the former East Germany. To avoid reforms is the surest survival strategy for Pyongyang’s ruling elite.

Throughout the past decade, the regime had no choice but to tolerate some degree of private economic activity, because of the collapse of its state-distribution system. But now that the North Korean economy has bottomed out and the famine appears to be over, largely due to generous aid shipments from the outside world, the Kim regime is in a position to get rid of changes that it never wanted in the first place. In addition to trying to curb the activities of private markets, it’s ordered most of the representatives of the international aid agencies that it reluctantly allowed into the country during the famine to leave by the end of the year.

The Kim regime can afford to act in this way because it knows that food aid from its two key patrons, South Korea and China, will keep flowing come what may. These now exceed shipments from elsewhere in the world. According to a recent report to the U.S. Congress, North Korea received 350,000 tons of food aid from South Korea and China in 2004 — compared with 325,000 tons from the World Food Program. Seoul also provides the North with much needed fertilizer, while China takes care of most of its energy needs.

China and, especially, South Korea claim to be supplying aid as part of a strategy of encouraging North Korea to embrace economic reform. That’s the ostensible aim of Seoul’s “sunshine policy” of one-sided concessions to the North, while Chinese leaders have shown visiting North Korean leaders around Shanghai and Shenzhen in an effort to encourage it to follow the same path. But, far from encouraging reform, North Korea’s recent actions show that it can take advantage of such unconditional aid to move in the opposition direction.

While Western countries insist on their aid being monitored by international relief agencies to try to prevent its diversion to the military, South Korea and China take a much more forgiving stance. Beijing wants stability on its borders, and would not be happy to see another nominally Communist regime collapsing. South Korea also wants to avoid the collapse of the Kim regime, since it would then have to foot the bill for an expensive and socially ruinous German-style unification. This means that both governments are ready to ship aid without asking too many awkward questions or demanding that it be closely monitored. Although ostensibly encouraging economic reform in North Korea, in reality both China and South Korea share the same short-term goal of preserving the status quo. They tacitly understand that means the regime must be able to continue to rely on its police and elite army units, and so needs to keep them well fed. That means turning a blind eye to the diversion of aid to the military, police and other members of the Pyongyang elite, even at the expense of the long-suffering North Korean people.

In the long run, this creates a paradox. Unless Seoul and Beijing are willing to foot the ever growing bills from Pyongyang indefinitely, they need to promote reforms there. However the North Korean regime has shown it has no interest in implementing reforms except when it is the only way to survive.

That creates an uneasy dilemma, which is shared by other foreign aid donors to North Korea. Stopping all aid could lead to renewed famine, especially in those areas of the country closed to foreigners. But excessive and unconditional aid is likely to halt all reforms, since the Pyongyang government would simply reverse to its old policies, using foreign aid to pay for the system’s inherent inefficiencies (and perhaps for a bit of luxury for Kim and his cronies). And recent events have clearly demonstrated have how counterproductive showering North Korea with aid can be.

Posted in Agriculture, Black markets, Economic reform, General markets (FMR: Farmers Market), International Aid, International trade, Nautilus Institute, Public Distribiution System (PDS), Transportation | Comments Closed

North Koreans Are Changing

Friday, October 28th, 2005

Korea Times
Andrei Lankov
10/28/2005

North Korea of 2005 is on a crossroad. Its people are not sure where to go, and its government tries hard to stay in control. But things are changing, the 50-odd years of Juche-style Stalinism are over or almost over. The long decease is not over yet, but there are clear signs of recovery. It has a future. This future is unlikely to be easy, but the country began its slow move forward.

It was a perfect sunny October day here. It was my first visit in two decades. I stood on the city’s main street, not far away from Kim Il Sung University which I attended 20 years ago, and was looking around.

A small crowd near the Chinese Embassy wall attracted my attention. People were carefully studying something inside a large window on the wall: some finished and went away, only to be replaced by others. Of course, I came closer.

The people’s attention was attracted by the pictures which were put into the Chinese Embassy’s “information window”. The pictures were large and colorful, but otherwise absolutely unremarkable. The photos and captions were no different from the stuff the cultural attaches across the globe put on the walls of their embassies – the usual boring fare about growth of shrimp production, new computer classes and state-of-the-art chicken farms. However, in North Korea of 2005 such mundane matters would attract a crowd. Those pictures gave a glimpse of the overseas life.

This small episode was a sign of what was in the air in North Korea of 2005: people are eager to learn more about the outside world. They are less afraid to show their interest in what once was forbidden knowledge, and they are increasingly uncertain about the future.

At a superficial glance, it feels as if the entire city has remained frozen in time since the mid-1980s. On my first day, I walked some 5-7 km across the downtown, and had no reason to worry that I might loose my way. All old buildings were still there, and very few structures appeared over those two decades.

The North Korean capital is still the same city of somewhat dilapidated Soviet-style apartment projects (with traditional huts hidden inside the blocks), nearly absent traffic, uniformed police girls on the crossroads, and crowds dressed in the old good “Mao suits”.

As a matter of fact, “crowds” might be an exaggeration. The city felt empty, and at all probability it was half-empty in those days. As part of the regular mobilization program, most of its population was sent to the countryside to work at the fields or to join the “battle for harvest” as this rather mundane operation is known in North Korea.

Like other socialist economies, North Korea has serious troubles with agriculture, and the townsfolk is required to provide manpower for the farms twice a year, during planting and harvesting.

However, this impression of unchanged city is misleading. The conversations with people clearly demonstrate that over those decades Pyongyang has changed – or rather its people has changed. It was the same city, but a different society.

People were frank – not as frank as they would probably be in most other countries, of course, but still much franker than in past.

When none of our supervisors was hanging around, it was possible to strike a meaningful conversation with a North Korean. And in a matter of minutes the conversation would slide to issues nobody was insane enough to approach 20 years ago.

People wanted to know how the life overseas looks like. They asked about salaries and prices, travel and housing. Well, these questions might sound a bit too materialistic for some of our readers.

Perhaps, but the North Korean government has always insisted that it is second to none when it comes to meeting material demands of the populace. And it seems that the North Koreans are beginning to feel doubts about truthfulness of these long-standing claims.

There are good reasons for such doubts. Even grossly privileged Pyongyang does not look like a rich city, to put it mildly. Of course, statistics about the large and growing gap between two Koreas (approximately 20-fold if per capita GDP is used) is widely known, but it is altogether different matter to see this disparity with one’s own eyes.

However, one cannot see Pyongyang as really impoverished. The serious poverty could be encountered in the countryside.

We could catch a glimpse of it on our way to the city of Kaesong. Compared to destitute north-eastern provinces, this is still the privileged part of the country, but the picture was disturbing.

The Pyongyang-Kaesong highway is a road of reasonable quality (albeit with bad paving), but it was completely empty, with hardly a dozen vehicles encountered over hundred kilometers.

There were almost no signs of agricultural machines in the fields, with harvesting made by bare hands of farmers and city dwellers who are mobilized to join the “battle for the harvest”.

The landscape was free from all those intrusive details of modern civilization which so often annoy tourists (of course, the tourists assume that they would have access to such amenities back home).

No mobile phone antennas, few motor vehicles, very few powerlines. Sometimes it was easy to imagine oneself transported back to the times of Tang Empire when the kings of Silla dynasty ruled the Korean peninsula.

This might be a good feeling, of course – as long as one does not think too much about people who have to live in this “romantic” area under nearly medieval conditions.

And these people looked bad – worse, actually, than 20 years ago when a motor harvester was still a usual sight in a North Korean paddy field. People in the countryside were undernourished, badly dressed, their brown seemed faces covered with deep wrinkles.

Kaesong was clearly one large step down the North Korean hierarchy of prosperity (or lack thereof). It was strange to think that we were merely two hours drive from the hyper-modern and affluent Seoul – and the sight of Kaesong makes one think about the likely impact which the unavoidable “discovery” of South Korean affluence will have on those destitute people.

It also makes to have second thoughts about unification – it is difficult to imagine how those destitute farmers will find the common ground with their brethren from another side of the border. They will do it somehow, no doubt, but adjustment is bound to be painful.

However, in spite of all destitution there are many reasons for hope. Within those days we managed to meet quite a few Western businessmen quietly operating in North Korea. In order to succeed in this strange and often treacherous environment, one should remain silent and as press-shy as possible, but there is a number of the foreign businesses operating there.

The businesspeople are surprisingly optimistic about ongoing changes and about the country’s future: they talk about great transformation they witnessed over the last few years. The private economy is growing fast and the local people are hard-working and full of initiative.

The officials are increasingly corrupt, of course, but this is not necessarily bad: if they are willing to accept kickbacks, they do not care that much about following the official regulations which often are remarkably unreasonable.

Of course, the growth of market economy does not mean only good things. One of few visual changes easily noticeable in Pyongyang was an increase in social inequality. Back in the 1980s, it was not that difficult to tell an official from a humble commoner. Officials were dressed better, and sported leather shoes while the commoner had the cloth-and-plastic footwear. However, the difference was not as pronounced as it is now when on the Pyongyang street there is a small minority (few percent, perhaps) of people whose dress would not be out of place somewhere in downtown Seoul.

Sometimes, things old and things new go hand in hand. In one of the companies we visited, I spotted what is probably the worst example of comically exaggerated propaganda I’ve ever seen (and somebody dealing with North Korea for 20-odd years has seen a lot of comically exaggerated propaganda).

The hand-written poster explained why Kim Jong-il was superior to all other great minds of the humanity: “Marx was 28 years old when he founded The Communists’ Union; Lenin was 25 years old when he founded The Working Class Liberation Union; but the Dear Leader was 11 years old when he founded the Group to study the strategy of General Kim Il Sung!”

The same place also had a floor plan which demonstrated what the Great Leader did when he visited the company back in the 1980s – the plan signs indicated where the great man stood for a minute and which path he followed while moving from one desk to another. However, the same factory was also a place where we saw the most rational manager, whose speech was remarkably free from all kinds of usual demagogy. This lady in her 50s spoke like any manager, from Alaska to Madagascar would probably talk to visitors.

Posted in Agriculture, Civil society, Economic reform | Comments Closed

Rallying round to boost Korean harvest

Friday, October 28th, 2005

BBC
Andrew Harding
10/28/2005

It was early on Sunday morning, but Roh Buk-chong, a 39-year-old postman, was already striding down the road leading north from Pyongyang.

“I am a volunteer,” he said. “I am going to help the farmers with the harvest – full of patriotic enthusiasm.”

He was not alone. In a scene strangely reminiscent of a 1950s Soviet propaganda film, the road was clogged with pedestrians and cyclists, heading for the nearby rice fields in the bright sunshine.

A government van passed by with loudspeakers on the roof, playing a rousing tune.

“They call me the girl who works well,” went the lyrics. “They call me the girl who works faster than the fastest horse.”

All this is part of what observers say is a concerted push by North Korea’s isolated regime to boost domestic food production, in a country where a third of the population is chronically malnourished.

It may be working. According to some predictions, this year’s harvest will be 10% larger than in 2004.

But that will not be enough, warned the UN World Food Programme’s country director, Richard Ragan.

“North Korea is chronically food insecure, so it’s unlikely in the near term that it will ever produce enough food,” he said.

Aid withdrawal

For the past decade, international food aid has helped bridge the gap for millions of North Koreans, many of whom starved to death during a famine in the mid-1990s.

The WFP now has 19 food processing plants in the country, helping to feed 6.5 million people.

It is backed up by a team of foreign monitors, who keep track of malnutrition rates.

But all that is about to change. North Korea’s heavily politicised drive for a bigger domestic harvest has been coupled with a new and more controversial move to end international food aid, and restrict the number of foreign aid workers in the country.

Although the details are being negotiated, all the WFP’s food plants are due to close within the next month.

“North Koreans are proud people,” said Mr Ragan. “They don’t want to create a culture of dependency, which makes a lot of sense.

“But there are still real humanitarian needs here, and it remains to be seen now they deal with them.”

Some aid is expected to continue in the form of development assistance next year.

China and South Korea are also likely to help make up any shortfall in food supplies.

But North Korea’s most vulnerable groups are now facing a period of uncertainty.

A key concern is how food will be distributed, and whether the army’s needs will be put ahead of the rest of the population.

High inflation recently prompted the authorities to abandon a market system for grain distribution, in favour of the old state-controlled policy – which the WFP has described as “inoperable”.

Posted in Agriculture, Civil society, Foreign aid statistics, International Aid, Public Distribiution System (PDS), UN World Food Program | Comments Closed

The North Korean ‘Salaryman’

Tuesday, October 11th, 2005

Korea Times
Andrei Lankov
10/11/2005

“How much do they earn there, in the North?” “What are North Korean salaries now?” These questions come naturally, even if people are aware that in a socialist economy the formal size of one’s salary is less significant an indicator of wealth than it is in capitalism.
Under socialism, access to goods is at least as important as the amount of money in somebody’s possession. Since retail prices in the socialist economies tend to be subsidized, this means that many goods are not readily available in shops, but are distributed by the state bureaucracy instead. Thus, people who are deemed more deserving get such goods… goods that are not available to the “less valuable” people.

A party bureaucrat and a skilled worker often might have roughly similar salaries in a socialist economy, but their actual consumption levels may be vastly different. Apart from bureaucrats, another group of people who have privileged access to commodities are people employed in the retail system. They always can divert some goods from the public distribution system and use them either for their own consumption, or for barter with those who control other valuable commodities. Thus, the position of a sale clerk is seen as very prestigious occupation in the North.

The 2002 reforms (never called “reforms” in the North Korean press) dramatically changed the structure of wages and prices in the country. For a while it was not clear what the current price and wages levels were, but recent research by the World Food Program seems to answer a few questions. Now we know what was regarded as “normal” wages in 2004.

According to the survey, most types of low-paid workers earn between 1,700 and 2,500 won per month, with an average estimated at 2,100. Low-level professional jobs such as clerks and teachers at nursery and primary schools earn between 1,400 and 2,000 won per month. The average old age pension is just 900 won; women, in particular housewives, sometimes get pensions as low as 300_400 won.

The official exchange rate is 1,700 won per Euro (they to play down the significance of the imperialist dollar, so exchange rates are usually quoted in euros). However, throughout 2004, the actual exchange rate fluctuated between 1,600 and 2,200. This means that the average pension was something like 50 cents a month, with a nursery teacher earning as little as one dollar a month. This is not as bad as it sounds, since prices are also relatively cheap. But this is still pretty bad…

Most of the people who draw salaries live in the cities (some 70% of the North Koreans are inhabitants of urban areas), and rely on the public distribution system for their survival. The system, which almost ceased to function a few years ago, obviously has made a moderate comeback. Since all data in the secretive North is classified, nothing is known for sure, but it seems that in early 2005, the Public Distribution System was “the main source of cereals for the 70 per cent of the population living in urban areas” (such was an estimate by the FAO, a U.N. food agency).

Still, the official rations are hardly generous. According to the WFP, in early 2005 rations were cut to 250 grams per person per day _ 40 per cent of the internationally recommended minimum. People have to purchase food on the markets, and this food is expensive, with rice costing some 500 won a kilo.

According to the FAO report, “the income of cooperative farmers from the annual obligatory crop sales to the Government varies greatly from one farm to another, resulting in monthly incomes per person ranging from 500 won to 4000 won.” But farmers can also substantially increase their income by selling the produce from their kitchen gardens, and by hillside farming which is done on the steep slopes of the mountains. The latter activity has become common in the North over the past decade. It is formally forbidden but done nonetheless, and it seems that a large part of the hillside produce goes outside the public distribution system.

Unemployment is quite high, but it is hidden. Formally, everybody has a job, but a persistent shortage of raw materials, spare parts, machinery, and power supplies means that few factories actually operate at full capacity. In many cases people come to their factories and offices and sit there idly, spending just a couple of hours a day doing some meaningful work. They still have to come, since otherwise they could lose access to food rations, and this would make their situation impossible, probably even threatening their physical survival.

According to interviews with officials, and other information garnered, the WFP estimated that some 30 percent of the North Korean workers are either permanently or temporarily underemployed or unemployed.

As usual, women are more likely to become unemployed. But perhaps they do not mind. Why? Well, is it possible for a family to survive, even on two salaries, if the official income can merely buy eight kilos of rice to augment the distributed 200 grams? Of course, the answer is “no”, and even in the most difficult circumstances people need more than just rice. Hence, the survival strategy of most families depends heavily on the efforts of their women. While formally seen as “unemployed housewives”, women produce most of the income, ensuring the family’s survival. Indeed, the new-born North Korean capitalism has a female face. But that is another story…

Posted in 2002 Economic reforms, Agriculture, Civil society, Labor conditions/wages, Political economy, Public Distribiution System (PDS), UN Food and Agriculture Organization | Comments Closed

Last orders, please

Monday, October 3rd, 2005

The Guardian
Jonathan Watts
10/3/2005

Of all the bars in all the world, there is probably none as exclusive, surreal or intriguing as the Random Access Club in Pyongyang. There are also few institutions that are quite so necessary to the mental well-being of the customers.

Open for business only on Friday nights, the RAC is a watering hole for North Korea’s tiny expatriate community; the 300 foreign residents allowed to live among the 22 million population of the planet’s most reclusive nation.

At first sight, the club inside the compound of the United Nations World Food Programme could not look more mundane nor the clientele appear less exotic. Apart from the decor – mostly copies of Chinese contemporary artworks – the simple bar, concrete walls and well-worn pool table might as easily belong to a church hall in Croydon as an expat hang-out in Pyongyang. The few dozen customers seem so earnest and engaging that they too could be mistaken for a suburban congregation rather than the disaster and war hardened aid workers and diplomats they really are.

What is bizarre is the context. The RAC is an oasis of modern globalised normality inside a land where time has not only stood still but gone backwards. North Korea exerts more control over its citizens than the Soviet Union in the dark days of Stalinism. It takes the ideology of 1984 to levels that George Orwell could not have dreamed of. It is rusting proof that the engine of industrial development has a reverse gear. And it is a dark and uncomfortable warning of what could happen to the world if we ever run out of oil.
To find a place like the RAC in the midst of this is like seeing a tiny postcard of Brighton beach stuck on Picasso’s Guernica, or having the latest Peter Greenaway film interrupted by a few seconds of Neighbours.

The bar’s short history is the story of the gradual opening of North Korea since the government reluctantly requested outside help to feed a population racked by famine, droughts and floods.

When it started in 1995, the WFP had just two representatives running a small aid project from rooms in the Koryo hotel. By 1997, North Korea had become the biggest humanitarian operation on the planet, with international organisations providing food and medicine to more than a quarter of the population.

In the meantime, the resident aid community – which included other UN agencies and about a dozen NGOs – had swollen to more than a hundred and been moved to the diplomatic district. The RAC emerged in response to the growing need among this group for a communal gathering point and a place to let off steam about the frustrations of working in such a difficult political and humanitarian environment.

Foreigners in Pyongyang arguably face more restrictions than their counterparts in any other country. They cannot make private visits to the homes of North Koreans, they cannot travel outside of Pyongyang without permission and they are not supposed to exchange their dollars and euros for local currency.

The work can be harrowing. Although the worst of the food crisis passed more than five years ago, some areas still suffer from poor nutrition and a lack of basic medicines. In remote outposts, WFP monitors can be extremely isolated. In Hyesan – a four-day drive from Pyongyang – the organisation’s representative lives alone for eight weeks in a basic hotel where the temperature in the lobby can fall as low as minus 17 degrees in the winter. There are no other foreigners, their local guides leave them at the weekends, and they are not allowed to socialise privately with Koreans.

In Pyongyang, the situation is not nearly as bad. Many visitors are surprised at the beauty of this showcase city. Compared to most capitals, it is clean, quiet and safe. There is sufficient food, some fine duck and noodle restaurants and even a little capitalist entertainment in the form of the casino, karaoke bar and golf course at the Yanggakdo hotel.

In addition, years of pure ideology – the utter subjection of the individual to the collective will of the state embodied by the leader Kim Jong-il – have produced some impressive (or scary, depending on your point of view) cultural marvels, such as the circus and the performances by young dancers and musicians at the children’s palace.

Those looking on the positive side of life in North Korea also point out the friendliness, innocence and high levels of education of many of the people they meet, as well as the cleanliness of the air in a country starved of energy and short on traffic. Because of this, and the frequent blackouts, Pyongyang is probably the best capital in the world for stargazing.

But the political problems undermine most of these benefits. Most foreigners accept their phones are bugged. Some suspect that much of what they see during inspections is staged. Even among the old-hands who have been in the country for years, many say they have never made a Korean friend.

This is largely because North Korea is gripped by a siege mentality – and not without justification. The country has been in a state of hot and cold war with the US since 1950. Outsiders are seen as potential spies or sources of ideological impurity.

There is good reason for the government to fear charity. Every smile or hand-out from a foreign aid worker undermines the state’s xenophobic propaganda and philosophy of “juche” self-sufficiency.

The WFP’s mission in North Korea is the only one where aid monitors do not have unrestricted access to the entire country. But the UN organisation has gradually widened its focus, pushing back the boundaries where it operates, expanding its presence to 42 foreign and 70 domestic staff, and meeting regularly with thousands of local officials who might otherwise never come into contact with a foreigner. Its monitoring ambitions remain the same as when the RAC was named: random access to all parts of the country.

This is the aspect of aid work that North Korea fears the most. Although the food and drugs are humanitarian, their side-effect is political. As most of the customers in the RAC will testify, one of the biggest changes since the aid operation began is in attitudes. Ten years ago, most North Koreans would turn their backs on a foreigner. Now they are almost as likely to smile.

That, more than anything, may be why the RAC could soon be losing most of its customers. The government has ordered all humanitarian work to end by the end of the year. Negotiations are still under way regarding what that will mean, but one resident’s estimate is that as many as 80 of the 120 aid officials in Pyongyang will have to pack their bags and leave by December 31.

The mood in the RAC has never been more gloomy. Out will go most of the young blood. Those who remain are likely to be diplomats, a sharply reduced corps of aid workers, five English teachers and a handful of businessmen.

“It’ll be like going back to 1994,” commented one regular at the bar.

“The jokes these days are black ones about all the second-hand fridges and cars that will flood into Pyongyang’s markets at the end of the year,” said another.

It is still possible that as one door closes others will open. North Korea welcomes economic development in the form of investors and technical support for infrastructure projects. The government wants to boost the tourist industry. A new railway is about to open across the demilitarized zone that will increase the flow of visitors from South Korea. The growing influence of Beijing is bringing in more people and goods from China. Progress in six-nation nuclear talks could also mean more atomic energy agency inspectors and diplomats from Japan and the US.

But ready or not, North Korea wants its independence back. It wants its future foreign guests to be visiting town on short-term visas, not moving in for years on end and setting up their own social club. For North Koreans and expats, there will be plenty of other bars, but at the RAC, it is time to drink up. The government may soon be calling last orders.

Posted in Agriculture, Civil society, International Aid, Restaurants, UNDP | Comments Closed

North Korea rejects UN food aid

Friday, September 23rd, 2005

BBC
9/23/2005

North Korea has formally told the UN it no longer needs food aid, despite reports of malnutrition in the country.

Deputy Foreign Minister Choe Su-hon said the country now had enough food, due to a good harvest, and accused the US of using aid as a political weapon.

Top UN relief co-ordinator Jan Egeland said an “abrupt” end to food aid would harm North Korea’s most vulnerable.

Pyongyang’s move comes as the world community continues to urge it to give up its nuclear ambitions.

Analysts say North Korea might be worried that accepting more food aid now could be perceived as a sign of weakness.

The North may also have lost patience with efforts by foreign agencies to monitor deliveries of food, according to the BBC’s Seoul correspondent, Charles Scanlon.

In recent years, the UN and other international agencies have been feeding up to six million of the poorest and most vulnerable North Koreans.

But these organisations have long struggled for access to one of the world’s most closed societies.

Even at the height of a famine in the mid-1990s, which may have killed two million people, they were tightly restricted and refused entry to large parts of the country.

Now the authorities are cracking down altogether, our correspondent says.

After meeting UN Secretary General Kofi Annan in New York on Thursday, Choe Su-hon told reporters: “We requested him to end humanitarian assistance by the end of this year.”

He said that the North wanted all foreign NGOs out by the end of the year, and added that the UN was to stop delivering food aid and to focus on long-term development instead.

Mr Egeland urged North Korea to reverse its decision, saying he was especially worried about the country’s children.

“Our concern is they (North Koreans) will not be able to have enough food. We are very concerned because we think this is too soon and too abrupt,” he said.

Gerald Bourke, a spokesman for the WFP, said that UN staff were currently discussing with the North Korean government what this meant in practice – adding that he was hopeful that current food-for-work and other community-based projects would class as longer-term development.

“We’re also talking to donors to see how much they still want to help us in this way,” he added.

Mr Bourke said that despite Mr Choe’s assertion of a better harvest in North Korea this year – and his pledge that the government was “prepared to provide the food to all our people” – there was still a considerable need for food aid.

“North Korea has a substantial and chronic food deficit,” Mr Bourke said, adding that malnutrition rates, especially for mothers and young children, were still very high.

Political issue?

Mr Choe also accused other countries, especially the US, of attempting to “politicize humanitarian assistance, linking it to the human rights issue”.

He said this constituted interference in the internal affairs of the country.

Washington rejected the suggestion it was mixing politics with relief work.

“All US decisions are based on… the need of the country involved, competing needs elsewhere and our ability to ensure that the aid gets to people who need it most,” a State Department statement said.

Another problem which analysts believe may have led to the North’s decision to ask foreign organisations to leave is the extensive surveying these groups are required to do, to ensure their money is being well-spent.

“Part of the problem is with our monitoring people moving around the country,” Mr Bourke conceded. “This is and has been a concern for them.”

In contrast, China and South Korea provide huge food shipments to North Korea without overseeing where it ends up.

The South says it gives such aid as part of a strategy to promote political reconciliation.

But diplomats and aid workers say these generous shipments have undermined the multilateral effect.

According to our correspondent, there is concern that if monitoring stops, so too will surveys to check the food gets to those most in need.

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

Wayward Food Aid in North Korea?

Tuesday, September 13th, 2005

US News and World Report
Thomas Omestad
9/13/2005

It is a question that policymakers in the Bush administration, other governments, and private relief agencies have pondered for years: How much of the considerable international food aid sent to hungry North Korea has been diverted away from its intended beneficiaries? The debate is not likely to end, but a significant study released this month by the U.S. Committee for Human Rights in North Korea takes a stab at an answer: 25 to 30 percent of it.

However, say the report’s authors, that diversion may not be the disaster it initially seems to be. Much of the redirected aid appears to move back into North Korea’s nascent food markets, where it is available to people who have earned the outside income to afford it. The diversions do not appear to be centrally directed but rather reflect the actions of North Korean agencies and people who are seeking financial gain, say the report’s authors, Stephan Haggard, director of the Korea-Pacific Program at the University of California–San Diego, and Marcus Noland, a senior fellow at the Washington-based Institute for International Economics.

The 56-page report (“Hunger and Human Rights: The Politics of Famine in North Korea”) is released at a sensitive moment: Talks among six nations, including North Korea, aimed at persuading the North to abandon its nuclear weapons programs are scheduled to resume today. Pyongyang delayed the resumption of the talks by some two weeks, saying it was reacting to the naming of a U.S. official to focus on human rights problems in the North and to U.S.-South Korean military exercises. The regime will undoubtedly be watching for any moves to back away from international aid commitments to feed the hungry in the nation of 23 million.

North Korea has suffered food shortages for well over a decade, and a famine in the mid- and late-1990s is believed to have killed up to 1 million people–though some estimates have put the figure higher. The public food distribution system staggered under the problem, and many North Koreans are now purchasing much of their food in markets, spending upwards of 80 percent of their income on food. North Korea has received more than $2 billion in food aid over the past decade, the U.S. contribution rising above $600 million of that. The United Nations World Food Program has not been able to meet its food contribution goals this year, a reflection, some analysts say, of international annoyance with North Korea’s stance on nuclear issues.

The report cites what Haggard describes as regime efforts at “systematically blocking NGO [nongovernmental organizations] aid.” Barriers include North Korean limits on the number of food-aid monitors allowed to follow distribution, preventing the WFP from deploying Korean-speaking staff, putting several counties (with 15 percent of the population) off limits, and requiring that inspection visits be announced ahead of time. All of that, the authors suggest, worsens the problem of aid being misdirected. Further, says Haggard, the North Koreans cut commercial imports nearly in tandem with growing food aid from other countries. The meaning: “The North Korean regime was using food imports as a sort of balance-of-payments support,” he says.

Despite their qualms, the authors do not advocate stopping food aid to the North, suggesting that China and South Korea–two countries that have tried to support the North with food aid outside of U.N. channels–would simply step in and fill the gap. They do want South Korea, in particular, however, to make its food donations through the WFP, where the monitoring is at least better. The South Korean government, however, says that it does inspect its distribution site in North Korea and stresses the need for North Korea to undertake an “equitable distribution of food.”

But no one should expect quick fixes to the challenge of verifying that aid to the North goes where it should be going.

“Absolute control is not possible,” Ells Culver, a cofounder of Oregon-based Mercy Corps, said in a recent interview with U.S. News. Mercy Corps is assisting with several agriculture projects in the North. “We’ll never get as much monitoring as in other countries.” Such pragmatism, however imperfect it is, may be the best approach to helping North Korea’s hungry.

Posted in 1990s Famine, Agriculture, Arduous March, International Aid, Mercy Corps | Comments Closed

Gap Between Rich and Poor in North Korea Growing

Tuesday, September 6th, 2005

Choson Iblo
9/6/2005

North Korea’s gap between rich and poor has been growing since the Stalinist country started economic reforms in 2002. While some have managed to better themselves to form something of a nouveau riche class, more than 70 percent are now getting only about half the needed calorie intake from state-run food distribution centers, the Financial Times reported Friday.

The World Food Program’s North Korea director Richard Ragan told the paper the wealthy are concentrated in five cities, including Pyongyang. They are the group that can be seen going to work on their bicycles, which cost triple the average monthly salary in North Korea. The newly affluent work mostly in retail and service industries and include tailors, ice cream sellers and bike repairmen who make money in general markets, which have multiplied to some 300 since 2002. Some farmers selling surplus produce are also part of what passes for a wealthy class in North Korea.

Most of those working in industrial production subsist below the minimum level, and tens of thousands of industrial workers in towns like Hamhung or Kimchaek are losing their jobs. Among those able to work, 30 percent are unemployed, and 70 percent of the population receives 250-380 grams of food a day from state-run food distribution centers — no more than half the necessary daily intake of nutrients.

The FT said the country as a whole is experiencing 130 percent inflation but poverty is no longer shared equally.

Posted in Agriculture, Economic reform, Fiscal & monetary policy, General markets (FMR: Farmers Market), Labor conditions/wages, Political economy, Public Distribiution System (PDS), UNDP | Comments Closed

Life Without Money

Tuesday, September 6th, 2005

Korea Times
Andrei Lankov
9/6/2005

For decades, money did not really matter in the North Korean economy and society. Levels of consumption were not determined by money expended, but rather by access to goods. Everything was distributed, and almost nothing was actually sold, at least from the 1970s when the Public Distribution system reached the height of its power.

Indeed, the history of the North Korean retail industries between 1948 and 1975 was one of a gradual demise of trade as it is generally known elsewhere. By the late 1940s most employees of state enterprises were being issued ration coupons. These coupons allowed them to buy goods at heavily subsidized prices. If they were not happy with them, they could go to the market.

In 1958 private trade in grain and cereals became illegal. For a while vegetables and meat were not rationed, but the number of items subject to distribution kept increasing, and by around 1975 the state shops had actually become nothing but outlets of the PDS. It was legal to buy and sell most goods on the market (grain and liquor remained an exception), however the North Korean economy was so structured that few goods could be produced outside the official economy. For this reason few goods could be channeled to the private markets. Thus, market prices were exorbitant, and people had to survive on what was supplied through the PDS.

However, the economic disaster and famine of 1996-2000 changed this situation. Markets began to spread across the country with amazing speed. In the years 1995-1997 nearly all plants and factories ceased to operate. In the worst period, in early 1997, the average utilization of major plants was reportedly a mere 46 percent of their capacity.

In most areas people still received ration coupons, but these coupons often could not be exchanged for food. Only in Pyongyang and some other politically important areas did food continue to be distributed through the late 1990s, but even here the norms were dramatically reduced: from the pre-crisis level of 500-700 grams a day (depending on one’s perceived value to the state) to merely 150-250 grams daily in the worst days of the famine. Even such small rations were not available to everybody. According to research by Meredith Woo-Cumings, as few as 6 percent of the entire population relied on the PDS in 1997.

Thus, many people, including myself, came to the conclusion that the PDS had died. This impression was reinforced in 2002 when the `economy improvement measures’ (never officially called `reforms’) were introduced. Then it was normally supposed by outside observers that consumption needs would be satisfied through markets.

But in 2004 and early 2005 new data emerged from the ever secretive North. It became clear that the Public Distribution System had not been dismantled. Indeed, it made a moderate comeback, largely due to foreign food aid which was largely channeled through the PDS.

Of course, the PDS does not even remotely reach its earlier ubiquitous levels. According to the FAO, the U.N. food and agriculture agency, in early 2005 the Public Distribution System was “the main source of cereals for the 70 percent of the population living in urban areas.’’ Farmers do not get food from the PDS. During the period November 2003 through October 2004, the average actual allocation through the PDS was about 305 grams, representing about half of a person’s daily needs. According to the World Food Program, in early 2005 rations were cut down to 250 grams per person per day — 40 percent of the internationally recommended minimum.

In October 2005 the North Korean government told its populace that the PDS would be re-started soon. So far, it seems that in Pyongyang the PDS indeed works at the 1990 level, but outside the capital the market remains the only place to find food.

In such a situation, the ability and willingness to engage in private business became a major guarantor of physical survival. A witty local observer described the situation in post-famine North Korea: “Those who could not trade are long dead, and we are only left with survivors hanging around now.’’

The major coping mechanisms are support from relatives in the countryside, wild food collection, and kitchen garden production. According to an FAO survey undertaken in late 2004, 57 percent of the PDS dependent population and “nearly all’’ farmers have kitchen gardens; about 60 to 80 percent of PDS dependents and 65 percent of coop-farmers gather wild foods; and 40 percent of surveyed households receive some support from relatives in the countryside (either as gifts or as part of barter deals).

It is important that farmers are allocated far larger rations, about 219 kilograms of cereals a year or 600 grams a day. They also have larger kitchen plots and can sometimes hide some additional food from hillside cultivation which is less strictly controlled by the state. According to the FAO estimates, kitchen gardens alone give the average farming household some 10 percent of its income.

As has been the case for decades, only a part of rations come as rice. Barley and maize, far less nutritious, comprise a large proportion of cereal consumption. The North Koreans’ approach to maize is clear from the fact that the rice/maize barter ratio is 1/2: for one kilogram of rice one expects to get two kilos of maize, and vice versa. In the period from September 2003 to September 2004 maize accounted for about half of all cereals distributed through the PDS.

But why is the PDS necessary, or why is it not possible to get rid of it altogether? The answer to this question is largely political and, as our readers guess, this will be another story.

Posted in 1990s Famine, 2002 Economic reforms, Agriculture, Agriculture statistics, Arduous March, Civil society, Fiscal & monetary policy, General markets (FMR: Farmers Market), Public Distribiution System (PDS), UN World Food Program | Comments Closed