Archive for the ‘Agriculture’ Category

Stand in Line for Half Day Long to Make a Phone Call

Wednesday, July 20th, 2005

Daily NK
Kim Young Jin
7/20/2005

Demand for Wire Telephones after the Government Confiscation of Cellular Phones

Recently in North Korea, demand for house phone skyrocketed and as the government confiscated personal cellular phones, people have also be increasingly using public phones.

It is known that setting a wire telephone for a household costs more than 450,000 Won and it is difficult to get one even after 4-5 months longs reservations.

Even Cellular Phones of Government Officials Confiscated

Park Young Chul (pseudo name, age 45) whom The DailyNK met in Tumen of China testified, “As the government completely banned the use of cellular phones after the Ryonchon Incident, demand for wire phones has been skyrocketing.”

Is the use of cellular phones still banned?

“It is hard to see cellular phones in North Korea. Not in local places, even in cities, people holding cellular phones cannot be seen.”

How about the Party cadres and managers of the state enterprises?

“The government confiscated all the cellular phones after the Ryongchon accident. They are still strictly banned. Even the provincial party cadres, National Security Agency, People’s Safety Agency officials are not allowed to use cellular phones.”

There are two kinds of cellular phones used in North Korea.

One kind is the official one acknowledged by the government, the GSM method of European style, which was used since 2002. Although it costs more than $1300 only to register and it is only usable in the city, it is known that more than 20,000 people are using this kind. Most of the users are foreigners and among the North Korean people, Party cadres and special government officials possessed it as the symbol of their special right.

The other kind is the Chinese wave, which the people use in secret along the Sino-Korean border areas. Although the number of users is unverifiable, it is known that the main purpose of their cellular phone use is to communicate with their family members in China and South Korea or with the dealers for their businesses. Due to the limitation in reach of the wave, these phones cannot be used extensively in inland. They are especially targeted by the government for control.

Then after the Ryongchon accident was known to the outside world by the cellular phones, the government of North Korea confiscated all the cellular phones last May. Although the foreigners are free from prohibition, there is no way for North Korean people to legally possess cellular phones.

Wire Phone Lines Still Hard to Get Even with Money

Then how do the people in North Korea communicate with each other?

“Usually by the wire phones (house phones). People who run business with other sellers and buyers in other verify their deals through phone. Those who have enough money seek to obtain their own phone line.”

Due to the limited means of transportation and communication, price differences between the regions varied much. For example, in Huiryeong of North Hamkyung province, the price of rice was low and the price of pollak pretty high while in Chungjin the opposite. People could take advantage of such price difference and earn money in between, for instance, by buying pollak in Chungjin and selling them in Huiryeong and buying rice from Huiryeong and selling it in Chungjin.

In the past such business were done only with guesses on price, but now phones are used to check the price differences. Recently dollar dealers are known for checking exchange rates through phone calls to China and even across the nation everyday.

How much does it cost to obtain a phone line?

“In the past it was not so difficult if you had money. Now, it is pretty difficult even if you had money. It cost about 450,000 to 500,000 North Korean won. That is a lot of money in North Korea. However, it is not a matter of how much it costs. The problem is that the government does not have enough of IC block necessary for switchboard of the Ministry of Communication to set up the phone line, so even if you had requested for a phone line, you are not guaranteed to get one.

Does that mean that someone has to withdraw a line for another person to get?

“Precisely. In the end, the cost of setting a phone line is actually the cost of selling and buying the IC block. The cost also includes the expense of laying phone line from the place where switchboard is located to the designated house. That is why it is so expensive.”

After the 7.1 Economic Management Improvement Measure in 2002, the average monthly wage of a North Korean worker ranges between 1500∼2500 won, thus 450,000won is the amount which an average worker has to save for 20 years without spending a penny, but the fact that “many people are willing to obtain” shows that there is a significant number of rich people present in North Korea.

Personal Identification and Deposit Money Required for the use of ‘Public Phones’

How is the situation of the public phones?

“They are called “common phones,” and two or three of them are located in each communications office or branch office in each area (district). There is a communications office in every 8km~12km and in the city about 4km.”

How much does it cost?

“It costs 10won for one local call. Before it was 50 jun (half of 1won) but recently the price increased. Of course the price varies for long distance called, they are more expensive. You have to leave your personal identification and 40-50won of deposit at the office prior to your make the call and when you are done you get them back after you pay.”

Why do you need personal identification and deposit money?

“They made this procedure because of some people who ran away without paying”

Are there many people using the public phones?

“There was a communications office about 4km away from my house, usually if I go, I had to wait about 30 minutes to make a call. Sometimes you have to waste as long as half of the day for your turn. Still, there are many people in line waiting.”

Park sighed and said, “Only if the transportation system were a little bit better, the living of the people would be much better. When one thing gets better, the government soon turns it down.” What we see is a scene of discord between the people who are already living in capitalistic style and the government that tries to deject it.

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Pastor aims to send rabbits to feed North Koreans

Wednesday, June 29th, 2005

Reuters
6/29/2005

A South Korean pastor is aiming to cut into North Korea’s severe food shortage by sending the reclusive state 1.2 million rabbits to eat.

Cho Soon-tae from the Evangelical Movement for National Unification said rabbits are tasty, resilient and reproduce, well, like rabbits, which would make them an ideal food source for North Korea.

With the help of seven pastors from leading South Korean churches, Cho secured more than $1 million to buy rabbits at a little under $1 each in China and transport them to North Korea.

“They will be delivered to the North in August by train from China,” Cho said by telephone.

Cho said he had asked permission from South Korean authorities to ship the rabbits and was in talks with officials from the North seeking their permission.

The U.N. World Food Programme has said North Korea is in the midst of a severe food shortage that may quickly grow worse as food stocks and international aid dry up. Many of the country’s 22 million people rely on food aid.

Cho said he thought about how he could help alleviate food shortages in the North after a visit to a kindergarten there that was sparsely attended because of malnutrition among the students.

If all goes well, Cho is looking to send more rabbit aid.

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North Korea applies new knowledge in water management

Thursday, April 21st, 2005

UNFAO
4/21/2005

North Korea (DPRK) is applying knowledge gained from a forestry project on sustainable development of upland water catchments and use of marginal agricultural land to help reduce soil erosion, protect natural resources and increase agricultural output in the country, FAO said today.

“In a country that largely depends on agriculture for self-sufficiency and has seen its agricultural production devastated by floods and droughts in the recent past, an integrated and participatory approach to watershed management is essential,” said Thomas Hofer, an FAO forestry expert.

“Applying watershed management throughout the country, planting trees in the uplands and developing integrated approaches to the use of natural resources will help diminish soil degradation and the dangers of downstream sedimentation,” Hofer said.

Trees help retain water in the soil, preventing water from flowing downstream all at once during heavy rains and keep moisture in the soil during low rainfall. Their roots also cling to the soil, making it more difficult for soil to erode.

Forests, soil erosion and agricultural output

Soil erosion and sedimentation from floods and droughts between 1994 and 2000 have caused massive destruction and reduced the country’s agricultural output in the last decade. In 1995 and 1996 alone, 16 percent of its arable land was damaged by floods The floods also destroyed irrigation and transportation infrastructure as well as 30 out of 90 tree nurseries.

To compensate for the drop in agricultural output, forests have been extensively exploited and converted into agricultural land on steep slopes of marginal lands, which are vulnerable to soil erosion. Forests were also felled for fuelwood and to earn foreign currency from the sale of forest products.

As a consequence, one quarter of North Korea’s non-agricultural land on hills and mountains is bare today.

Tree nurseries and training

To put an end to this vicious cycle and offset the progressively diminishing forest quality and agricultural output, in 2001 FAO launched at the request of the government a watershed management project to reverse degradation of upland resources by addressing the decline of natural forest cover.

FAO has also helped the government to analyze the situation of upland resources, to collect data on forest land degradation and to identify measures to conserve and develop forest and other natural resources. It has rehabilitated damaged nurseries and established new ones for reforestation. Two small-scale pilot and demonstration sites for long-term management of watersheds have been established and country people have been trained to apply their newly-gained knowledge from the sites for replication elsewhere.

Based on the experience of the project, North Korea is now developing a watershed management plan for the Taedong River, which flows through the capital, Pyongyang.

“By applying elsewhere what we have learned from the pilot sites, we hope to see sustainable use of natural resources and greater agricultural output in the country,” Hofer said.

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Bird flu outbreak in North Korea

Sunday, March 27th, 2005

BBC
3/27/2005

North Korea says it has had a first outbreak of the deadly bird flu virus.

The state Korean Central News Agency said no people had been infected but hundreds of thousands of chickens had been culled and the carcasses burned.

The agency only said that the outbreak was “recent” and occurred at “two or three” chicken farms. It did not specify the virus type.

The H5N1 virus has killed almost 50 people since its resurgence in South East Asia in December 2003.

Tight controls

KCNA said Hadang farm in Pyongyang, among the city’s largest, was one of the sites of the outbreak.

North Korea had previously said it was free of the virus that has struck many countries in south and east Asia.

South Korean news agency Yonhap earlier this month reported an outbreak at Hadang, prompting the World Health Organization (WHO) to ask the reclusive North for information.

The North has relied on food aid for more than a decade but imposes tight controls on foreign visitors and aid workers.

Experts fear the H5N1 virus could eventually combine with human flu and threaten a deadly pandemic.

There are suspected cases of the virus being passed between humans.

Seoul offers N Korea bird flu aid
BBC

3/28/2005

South Korea has said it is ready to help the North combat bird flu, after the isolated state publicly admitted on Sunday that it was fighting the virus.

Pyongyang has not asked Seoul for assistance, but a South Korean official said the official announcement appeared to indicate the North would accept aid.

The North says no people have been infected but hundreds of thousands of chickens have been culled.

Analysts warn that the virus could wipe out its fledgling chicken industry.

“North Korea, plagued by food shortages, has struggled to modernise and build facilities for the breeding and processing of chicken, a main source of animal protein,” Kwon Tae-jin, an expert on North Korean agriculture based in Seoul, told the South Korean Munhwa Ilbo newspaper.

The North has not specified the type of bird flu virus it is battling. The H5N1 virus has killed almost 50 people since its resurgence in South East Asia in December 2003.

The state Korean Central News Agency only said that the outbreak was “recent” and occurred at “two or three” chicken farms.

The World Health Organization (WHO), which has an office in Pyongyang, said it had been contacted by the North, and would co-ordinate counter-measures.

South Korea was to hold several meetings on Monday to decide on a strategy to help the North.

It has already put in place measures to prevent the spread of bird flu into the South, as rumours first surfaced of an outbreak in the North earlier this month.

South Korea has itself suffered several outbreaks of bird flu, but no human infections.

Experts fear the H5N1 virus could eventually combine with human flu and threaten a deadly pandemic.

There are suspected cases of the virus being passed between humans. So far, Vietnam has been the country hardest hit by this year’s outbreak of bird flu.

UN bird flu expert visits N Korea
BBC
3/30/2005

A senior United Nations bird flu expert has gone to North Korea to try to prevent the spread of the virus.

North Korea confirmed on Saturday that bird flu had been detected in several farms near the capital, Pyongyang.

State media said hundreds of thousands of chickens had been destroyed to prevent the virus from spreading, and no humans had been affected.

The UN has also sent diagnostic kits to help the North Koreans determine if the birds died from the deadly H5N1 strain.

This strain of bird flu has killed almost 50 people since its resurgence in South East Asia in December 2003.

Hans Wagner, a senior official from the UN’s Food and Agriculture Organization, flew to Pyongyang on Tuesday, and will be joined by two other experts from China and Australia in the coming days.

Survivor’s story

“They will look at the strategies being set up by the government and also bring some supplies,” FAO spokesman Diderik de Vleeschauwer told Reuters news agency.

South Korea’s Yonhap news agency reported on Tuesday that the North Korean authorities were struggling to control the outbreak, and the disease was spreading quickly.

Analysts warn that the virus could wipe out the poverty-stricken country’s chicken industry.

Before the bird flu outbreak, poultry production was one of the few growing sectors in North Korea. The number of poultry was estimated at 25.5m in 2004, about two times higher than in 1997.

N Korean bird flu ‘different’
BBC
4/5/2005

A strain of bird flu infecting poultry in North Korea is different from that which killed scores of people in other parts of Asia, a UN expert has said.

Hans Wagner, an official for the Food and Agriculture Organization, said the birds were infected with the H7 strain.

The strain that has decimated poultry stocks and caused recent human deaths in Cambodia, Thailand and Vietnam is the more virulent H5N1 strain.

North Korea has culled 219,000 birds to tackle the outbreak, Mr Wagner said.

“We have a new situation, because H7 has so far not occurred in Asia,” he told reporters.

“We don’t know where the virus came from,” he said, adding that UN experts would now try to trace the source of the infection, to prevent future outbreaks.

H7 can cause illness in humans, but outbreaks of the strain have not been as severe as those caused by H5N1.

H5N1 has killed almost 50 people since its resurgence in South East Asia in December 2003.

When North Korea first announced that three of its farms had been infected with bird flu last month, analysts warned that the virus could wipe out the poverty-stricken country’s chicken industry.

Poultry production is one of the few growing sectors in North Korea, which has relied on foreign aid to feed its people since the mid-1990s.

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North Korea’s stunted policy stunts children

Tuesday, March 15th, 2005

Asia Times
Aidan Foster-Carter
March 15, 2005

It’s a cliche to complain how little we really know about North Korea. Hard facts, and especially figures, are indeed hard – as in hard to come by.

In some fields this is perfectly true. The military, obviously. Does North Korean leader Kim Jong-il have the bomb or bombs? How many? Where is he hiding them? All countries keep that kind of information secret.

But no other nation in the world fails to publish any regular statistics about its economy. This 40-year silence should temper hype about market reforms. Without numbers, neither local enterprises nor external donors or (they wish) investors can do more than gamble in the dark. They really do need to know. Providing accurate numbers is a basic prerequisite of being a modern state.

Yet North Korea possesses a Central Bureau of Statistics (CBS), and it is not idle. No doubt the Dear Leader demands economic data – for his eyes only. But in some fields, the CBS does publish its work. One example was North Korea’s 1993 census, its first ever.

More recently the CBS has worked with international aid agencies to collect information that the latter need in a key area: hunger and its human consequences. The latest fruits of such cooperation have just been published in the “DPRK 2004 Nutrition Assessment Survey”, a joint product of the Central Bureau of Statistics and North Korea’s Institute of Child Nutrition (ICN), with financial and technical help from United Nations Children’s Fund (UNICEF) and the United Nations World Food Program (WFP). The two chief consultants were from Australia and Vietnam, so this was a regional Asian effort. It follows earlier surveys carried out at two-year intervals, in 1998, 2000 and 2002.

It was the WFP that released this report, at a press conference in Beijing on March 7. It is in fact dated November 2004; the survey itself was carried out in October. The delay wasn’t explained. Perhaps the lag was attributable to translation time and to make sure it was fit for publication generally.

I’m often critical of North Korea, so all the more reason to give credit when it’s due. This is an impressive, highly professional report comprising 104 pages, five chapters, 46 tables, 24 figures. The sample was 4,800 children, ages up to six, and 2,109 mothers of children under two, drawn evenly from seven of North Korea’s nine provinces plus the capital, Pyongyang.

Having taught social science research methods in a former life, I get a kick out of reading about random and cluster sampling (sad, I know). Then I pinch myself. This is North Korea. An official document! All these numbers! And on a potentially very sensitive subject, too.

For what this survey measures, with grim precision, is what years of hunger have done to the bodies of small children – and I do mean small – and their mothers in North Korea.

To be technical, there are three main criteria:

*Underweight (for age) is self-explanatory;
*Stunting, low height for age, signals chronic malnutrition;
*Wasting, worst of all, is low weight relative to height, indicating acute malnutrition. Each of these categories is sub-divided into mild and severe cases. For the mothers, a fourth measure was used: MUAC (mid-upper arm circumference). Less than 22.5 centimeters means they aren’t eating enough.

So how are Juche’s (juche is the policy of self-reliance) children faring? The WFP’s press release tried to look on the bright side. Since the last survey in 2002, the proportion of young children chronically malnourished (stunted) is down from 42% to 37%. Acute malnutrition (wasting) eased from 9% to 7%. But those underweight rose from 21% to 23% – though for children under the age of two, those most at risk, this fell from 25% to 21%. One in five children had diarrhea, and one in eight showed symptoms of acute respiratory infection. But mothers have made no progress: a third were anemic and malnourished, the same figure as two years ago. Vitamin A deficiency is common.

Much depends on where people are living. Things are less bad in Pyongyang and in the southwestern Hwanghae farming region than in bleak northeasterly Hamgyong and Ryanggang provinces. Ryanggangites get to eat meat, fish or eggs just once every three weeks on average. Chagang in the far mid-north is bleaker still, but North Korea doesn’t allow access to this area – probably because of military bases located there. Thus, no survey was conducted in Chagang, which means no food aid either; the WFP is strict about that – surveys first.

Even at the national level, the few slight improvements offer scant comfort. The more than one-third (37%) of North Korean’s under six who are stunted – and especially the one in eight (12%) who are severely stunted – will grow up stunted and stay that way. Even once Korea is reunified politically, they will stand out physically: dwarfed by their Southern peers.

Seoul, meanwhile, has different – nay, opposite – child health issues. With uncanny timing, the very same day as the WFP released its survey on the North, education officials in the Southern capital reported that one in 10 schoolchildren in Seoul is overweight. Obesity rates are growing fast, too. As the old adage has it, the rich slim while the poor starve.

Back in the North, the WFP doesn’t appear to be leaving any time soon. Richard Ragan, head of the program’s Pyongyang office – and an American, to boot – said he hopes the agency will shut up shop one day, once the government and the private sector can stand on their own feet.

But for now, one anniversary a proud North Korea won’t be celebrating, is that this year marks a whole decade since it first, reluctantly, asked the WFP and other agencies for help coping with flood and famine. While the worst of the famine has eased, food self-sufficiency – in a country so mountainous that this is a ludicrous goal anyway – looks as remote as ever.

So still, in 2005, the WFP has extended the begging bowl for Kim Jong-il – whose own priorities evidently lie elsewhere. Ever prickly Pyongyang has bitten the kind hand trying to feed it, forbidding UN agencies to launch their usual formal consolidated aid appeal this year. Nonetheless the WFP is seeking $202 million with which to buy 504,000 tonnes of food, mainly grains.

And no wonder. In January North Korea cut its Public Distribution System (PDS) rations to starvation level: 250 grams of cereal per person per day, the lowest in five years. Such cutbacks don’t usually happen until March, when last year’s crop typically runs out. This is all the more odd, since 2004’s autumn harvest is thought to have been the best in years.

Luckily, the WFP currently has enough stocks – as it did not, in the recent past – to feed all of its target group: a staggering 6.5 million North Koreans, or nearly one-third of the entire population. The main categories within this group are 2.7 million children from birth to the age of 10 and 2.15 million people in food or work programs. Other beneficiaries include 900,000 elderly, 300,000 pregnant women and nursing mothers, and 350,000 in low-income households. The latter are a new category: victims of the post-2002 reforms that have seen inequalities widen, even as the state retreats ever further from providing any help to the millions of citizens whom its disastrous past and half-baked present policies have starved and stunted.

That’s my take, not the WFP’s. Diplomacy precludes any such critique from a UN body. Yet the raw data, the results – written indelibly on the bodies of innocent children, marked for life – are there for all to see. It’s ironic, but the same regime that branded this suffering on its people is at least now registering and owning up to the outcome: collating and publishing these damning data, putting its name to the survey, and signing off on it. That’s a start.

Where his statisticians boldly go, will the Dear Leader follow? It’s so simple. Ditch nukes; watch aid explode instead. Let the children eat, and grow. If not, what future is there?

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North Korea has bigger harvest

Tuesday, November 23rd, 2004

UNFAO
11/23/2004

Despite its best harvest in ten years, the Democratic People’s Republic of Korea (DPRK) will post another substantial food deficit in 2005 and require external aid to support more than a quarter of its 23.7 million people, two United Nations agencies said today.

A report by the Food and Agriculture Organization (FAO) and the World Food Programme (WFP) projected domestic cereals availability in the 2004/05 marketing year (November-October) at 4.24 million tonnes, including milled rice and potatoes – a 2.4 per cent increase on 2003/04.

However, it warns that insufficient production, a deficient diet, lower incomes and rising prices mean that 6.4 million vulnerable North Koreans – most of them children, women and the elderly – will need food assistance totaling 500,000 tonnes next year.

Good weather improves 2003 harvest

The 2004 rice paddy harvest was estimated at 2.37 million tonnes, up from 2.24 million tonnes in 2003, thanks primarily to favourable weather, a low incidence of crop pests and diseases, and improved irrigation in the country’s cereal belt. Maize output was unchanged at 1.73 million tonnes.

Forecasting total cereal needs for 2004/05 at 5.13 million tonnes, the UN agencies projected an import requirement of almost 900,000 tonnes. Given anticipated concessional and commercial imports of 400,000 tonnes, the residual gap will be about 500,000 tonnes.

Most of the 16 million people receiving subsidized cereals from the government-run Public Distribution System (PDS) averaging 300 grams per person per day – half a survival ration – cannot make ends meet. They turn to more expensive private markets yet “they are still not able to cover their basic energy requirements,” FAO and WFP said.

Despite good harvest, external food aid needed

The report, which followed a joint assessment mission by the Rome-based food agencies in September and October, says, “the continuing national shortage is still a problem” so “external food aid is in part seen within the context of overall domestic availability.”

It also noted that, increasingly, “the most critical problem for poor households is their lack of access to basic and nutritious food because of declining purchasing power.” As a result, assistance to the food-insecure population “should now be determined more by their household food gap than the national food gap in cereal production.”

“A balanced diet is out of reach for all but a few PDS-dependent households,” the report says. “The situation remains particularly precarious for children in kindergartens, nurseries, orphanages and primary schools, pregnant and nursing women, and elderly people.”

Price of food on new private markets up dramatically

While the prices of state-subsidized rice and maize rationed through the PDS have remained low and stable (at 44 and 24 won a kilo, respectively), prices in private markets have risen dramatically since the introduction of economic reforms in mid-2002.

Last month, rice cost as much as 600 won a kilo in such markets – almost 30 per cent of a typical monthly wage – compared to the 2003 average of 120 won; maize was 320 won a kilo, up from last year’s peak of 110 won. In September, one Euro bought 1600 won on the parallel market.

“The ability of low-income families to obtain food from the market is severely restricted due to their deteriorating purchasing power affected by under- or unemployment and sharp rises in food prices in the market,” according to the report.

An unintended consequence of reform has been the problem of higher food prices, which has been compounded by widespread and steep cuts in already meagre wage earnings as ailing enterprises in predominantly industrial DPRK shed labour.
Food rations meet just half a person’s minimum needs

The typical wage earner’s family now spends one-third of its monthly income on PDS rations that meet only half its minimum caloric needs. Another one-third is spent on non-food essentials – rent, heating and clothing. The remainder is insufficient to purchase enough food in private markets to meet the rest of the family’s very basic needs.

Much of the population, consuming very little protein, fat or micronutrients, suffers from critical dietary deficiencies. Fresh vegetables and fruit are either scarce or very expensive outside of the July-September period.

Traditional coping mechanisms such as animal husbandry, the cultivation of household gardens and hillside plots, the gathering of wild foods and transfers from relatives in the countryside, afford some relief to hard-pressed urban residents. Small-scale income-generating activities, notably petty trade and services, allowed under an easing of restrictions on private and semi-private enterprise are other sources of much needed income.

Better farm machinery and improved soil fertility needed

To deal with the chronic, structural food deficit, the FAO/WFP report recommended that the international community enter into a dialogue with the DPRK government toward the eventual mobilization of the economic, financial, and other resources needed to promote sustainable production and overall food security.

The report also proposed examination of investment projects on soil fertility and better farm machinery to allow further expansion of the country’s double-cropped area.

WFP has provided the DPRK with almost four million tonnes of food assistance, valued at $1.3 billion, since 1995.

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Mother of All Mothers: The Leadership Secrets of Kim Jong Il

Wednesday, September 1st, 2004

Atlantic Monthly
B. R. Myers
9/1/2004

You’ve just finished your life’s work, a bold new history of the Watergate burglary in which you manage to prove that the White House was out of the loop, but the ink is hardly dry when an eighteen-minute tape surfaces in a Yorba Linda thrift shop, and soon the whole country is listening to Nixon gangsta-rap about how he personally jimmied the door open. It’s every revisionist’s nightmare, but Bruce Cumings, a history professor at the University of Chicago, has come closest to living it. In a book concluded in 1990 he argued that the Korean War started as “a local affair,” and that the conventional notion of a Soviet-sponsored invasion of the South was just so much Cold War paranoia. In 1991 Russian authorities started declassifying the Soviet archives, which soon revealed that Kim Il Sung had sent dozens of telegrams begging Stalin for a green light to invade, and that the two met in Moscow repeatedly to plan the event. Initially hailed as “magisterial,” The Origins of the Korean War soon gathered up its robes and retired to chambers. The book was such a valuable source of information on Korea in the 1940s, however, that many hoped the author would find a way to fix things and put it back into print.

Instead Cumings went on to write an account of postwar Korea that instances the North’s “miracle rice,” “autarkic” economy, and prescient energy policy (an “unqualified success”) to refute what he calls the “basket-case” view of the country. With even worse timing than its predecessor, Korea’s Place in the Sun (1997) went on sale just as the world was learning of a devastating famine wrought by Pyongyang’s misrule. The author must have wondered if he was snakebit. But now we have a new book, in which Cumings likens North Korea to Thomas More’s Utopia, and this time the wrongheadedness seems downright willful; it’s as if he were so tired of being made to look silly by forces beyond his control that he decided to do the job himself. At one point in North Korea: Another Country (2004) we are even informed that the regime’s gulags aren’t as bad as they’re made out to be, because Kim Jong Il is thoughtful enough to lock up whole families at a time.

The mixture of naiveté and callousness will remind readers of the Moscow travelogues of the 1930s, but Cumings is more a hater of U.S. foreign policy than a wide-eyed supporter of totalitarianism. The book’s apparent message is that North Korea’s present condition can justify neither our last “police action” on the peninsula nor any new one that may be in the offing. It is perhaps a point worth arguing, particularly in view of the mess in Iraq, but Cumings is too emotional to get the job done. His compulsion to prove conservative opinion wrong on every point inspires him to say things unworthy of any serious historian—that there was no crime in North Korea for decades, for example—and to waste space refuting long-forgotten canards and misconceptions. Half a page is given over to deriding American reporters who once mistook Kim Il Sung’s neck growth for a brain tumor—talk about a dead issue.

Cumings is even harder to take when he’s in a good mood. By the time he has noted a vague resemblance between Kim Jong Il and Paul Anka, sniggered about “horny” Korean housewives, and mocked both a tour guide’s English and an African man’s surname (“I dissolved in hysterics”), most readers, with no photograph of the author to go on, will find themselves mentally exchanging his professorial tweeds for a very loud leisure suit. Most offensive of all is the book’s message that we shouldn’t be too hard on the dictatorship in Pyongyang, because human rights aren’t as important to Koreans as to the rest of us.

Does this system promote human freedom? Not from any liberal’s standpoint. But from a Korean standpoint, where freedom is also defined as an independent stance against foreign predators—freedom for the Korean nation—here, the vitriolic judgments do not flow so easily. This is a cardinal virtue among a people that has preserved its integrity and continuity in the same place since the early Christian era … After all, there is one undeniable freedom in North Korea, and that is the freedom to be Korean.

It seems to have slipped the professor’s notice that many countries manage to stay independent without dragging children off to gulags, and that North Korea is a place where a lot of characteristically Korean behavior—speaking bluntly, for example—is punishable by execution. The only significant part of the culture that can be freely indulged under Kim is its ethnocentric streak, which is what Cumings all but reduces it to; confusing cause and effect, he sees propaganda as the reflection of the popular soul instead of (to use Stalin’s metaphor) the engineer of it. The Korean people have always been more outward-looking than their insecure leaders, and for centuries this was especially true of those in the northern part of the peninsula. Even in the months after our disgraceful bombing campaign during the war—a campaign that Cumings rightly calls a holocaust—diplomats in Pyongyang noted no signs of indiscriminate xenophobia.

This was soon to change. Throughout the 1950s the regime resorted to crude racism in its anti-American propaganda, often treating inset eyes, big noses, and other Caucasian features as the manifestation of villainy. To the consternation of the diplomatic community, little effort was made to enlighten people about the existence of friendly big-noses, even though—as this spring’s Cold War International History Project bulletin makes clear—North Korea’s cities were rebuilt and its people fed and cared for with enormous amounts of assistance from Eastern Europe. “They expect foreign countries,” one Hungarian diplomat noted, “to give them everything.” Reading the CWIHP bulletin has the odd effect of making one realize what a relatively sensible bunch of people the Soviets were. In the mid-1950s they opposed Kim Il Sung’s brutal collectivization of agriculture; Kim brushed off their advice, only to demand food aid when a murderous famine ensued.

The more the regime evinced its incompetence by relying on foreigners, the more it needed to restrict the people’s contact with them. By the 1960s the party line had taken a turn that reminded a Soviet diplomat of Nazi Germany, as citizens who married Europeans were banished to the provinces for “crimes against the Korean race.” A diplomatic report translated in the CWIHP bulletin shows how the masses finally got into the spirit of things. In March of 1965 the Cuban ambassador was driving his family and some Cuban doctors around Pyongyang when they stopped to take pictures. Hundreds of adults and children quickly swarmed the diplomatic limousine, pounding it with their fists, tearing the flag off, and ordering the occupants to get out. Their rage and insults, directed mainly at the ambassador “as a black man,” abated only when a security force arrived to beat back the mob with rifle butts. (Not for nothing did Eldridge Cleaver say that the North Korean police made him miss the Oakland police.)

“The level of training of the masses is extremely low,” a party official later admitted to the ambassador. “They cannot differentiate between friends and foes.” In other words, everything was going as planned. The regime went on to blur the distinction further by excising all mention of outside assistance from the history books, even as it continued to squeeze billions of dollars from its cash-strapped allies. For decades a foreign proletariat toiling in dingy factories from Vladivostok to Karl-Marx-Stadt helped bankroll Pyongyang’s transformation into a proud monument to ethnic self-reliance, so that someday a Bruce Cumings could boast that it is anything but the ugly Communist capital one might expect. Well into the 1980s Kim was telling leaders of aid-donating states that he was having trouble meeting the basic needs of his people. If South Korea’s dictatorships were America’s running dogs, then North Korea was the Eastern bloc’s house cat: intractable, convinced of its superiority, and to some observers a more independent creature, but never much good at feeding itself—even after the can openers started falling silent in 1989.

The question of where Europe ends and Asia begins has troubled many people over the years, but here’s a rule of thumb: if someone can pose as an expert on the country in question without knowledge of the relevant language, it’s part of Asia. Europeans hoping to lay claim to North Korea should therefore brace themselves, because Bradley Martin’s publisher is touting Under the Loving Care of the Fatherly Leader (2004) as the definitive work on its subject, though it belongs squarely in the “a puzzled look crossed the faces of my guide and interpreter” tradition of monoglot scholarship. Although hardly definitive, it is still an excellent book, well researched and lucidly written. It is especially refreshing to find someone showing serious interest in North Korean propaganda instead of merely hooting at it.

The problem is that the official translations on which Martin was forced to rely do not always reflect the original. Kim Il Sung’s title Eobeoi Suryeong means not “Fatherly Leader”—a common rendering that encourages Martin to exaggerate the influence of Confucianism on the personality cult—but “Parent Leader,” the most feminine title the regime could get away with. As the country’s visual arts make clear, Kim was more a mother to his people than a stern Confucian patriarch: he is still shown as soft-cheeked and solicitous, holding weeping adults to his expansive bosom, bending down to tie a young soldier’s bootlaces, or letting giddy children clamber over him. The tradition continues under Kim Jong Il, who has been called “more of a mother than all the mothers in the world.” His military-first policy may come with the title of general, but reports of his endless tour of army bases focus squarely on his fussy concern for the troops’ health and comfort. The international ridicule of his appearance is thus as unfair as it is tedious. Anyone who has seen a crowd of Korean mothers waiting outside an examination hall will have no difficulty recognizing Kim’s drab parka and drooping shoulders, or the long-suffering face under the pillow-swept perm: this is a mother with no time to think of herself. When it comes to the Workers’ Party, the symbolism is even more explicit, as in this recent propaganda poem:

Ah, Korean Workers’ Party, at whose
breast only
My life begins and ends
Be I buried in the ground or strewn
to the wind
I remain your son, and again return to
your breast!
Entrusting my body to your
affectionate gaze,
Your loving outstretched hand,
I cry out forever in the voice of a child,
Mother! I can’t live without Mother!

It’s easy to imagine what Carl Jung would have made of all this, and he would have been right. Whereas Father Stalin set out to instill revolutionary consciousness into the masses (to make them grow up, in other words), North Korea’s Mother Regime appeals to the emotions of a systematically infantilized people. Although the propaganda may seem absurd at a remove, it speaks more forcefully to the psyche than anything European communism could come up with. As a result, North Korea’s political culture has weathered the economic collapse so well that even refugees remain loyal to the memory of Kim Il Sung.

The Yangs, for example, are former Party members who recently defected to the South with their two boys. As part of a campaign to prevent the formation of a refugee ghetto in Seoul, the family was resettled in Mungyeong, a charmless sprawl of apartment blocks and love hotels a few hours to the southeast. I visited them there in May. As we sat on the floor of their tiny living room, I told them how a young refugee once shrank from my approach because—as she later explained—I looked like the stick-nosed Yankee effigies she used to run knives into after school. “Yes, you do have …” the mother shouted over the general laughter, but she caught herself in time. Turning to the older boy, who is sixteen, I asked what wisdom he could remember from the Parent Leader. “Man is the master of his own destiny,” he said shyly, his voice trailing off. What about his parents? “We didn’t memorize sentences,” the mother said, embarrassed, so I asked her to explain Kim Il Sung’s ideology of Juche for me in her own words. “The main thing is, man is the master of his destiny,” she said briskly. “And?” I asked. Silence. “Well,” I said, “if people are the masters of their destiny, why do they need a leader?” The younger boy came to his mother’s aid: “It was something about flowers needing the sun to grow.” Everyone frowned at my pen scratching away; they were letting the Parent Leader down. “It wasn’t so much what Kim Il Sung said,” the father blurted out at last.

This is of course true. Expanses of tautological prose have been ghostwritten to fatten the spines of the two Kims’ collected works, but few people ever read them. North Korea is a unique socialist country in that its ruling ideology is conveyed through what is written about its leaders, not by them, and the message could hardly be simpler: Foreigners bad, Koreans good, Leader best. “The most important thing to us was that Kim Il Sung suffered for the people; he fought for us,” the boys’ mother said. With a start I realized that this elegant fortyish woman, who now sells American cosmetics for a living, had tears in her eyes. “The Leader would sit on the ground with farmers, just like we’re sitting here now. And if he shook someone’s hand, that person would be happy forever. Of course, Kim Jong Il is not like that.” Conversation turned to the railway explosion in the North at the end of April, and to the regime’s immediate focus on the material damage. “It’s because Kim Jong Il never suffered,” the father said bitterly. “What does he know about the common people?”

It would appear that Kim knows just enough. The border with China remains so porous that even children often sneak back and forth, and yet no more than three or four percent of the population has chosen to flee for good. The regime obviously did the smart thing by publicly acknowledging the food shortage and then blaming it on American sanctions, instead of pretending there was no food shortage at all, as Stalin used to do. The Dear Leader has also deftly exploited the tradition according to which Koreans care for their parents in old age: the masses are told that it is their job to feed him, not the other way around, and his famed diet of “whatever the troops are eating” is routinely invoked to shame everyone into working harder. Never has a dictator been such an object of pity to his people, or such a powerful source of guilt. In 2003 North Korean cheerleaders, living it up on a rare visit to a sports event in the South, responded to a rain-soaked picture of Kim by bursting into a hysterical lament that baffled their hosts.

To concede the effectiveness of the personality cult is not to agree with Selig S. Harrison’s startling assertion, in Korean Endgame (2002), that Koreans have a “built-in readiness … to accept as truth what is dispensed from higher authority.” No regime ever needed to subject its citizens to a lifetime of brainwashing in order to make them follow their natural inclinations. What must be acknowledged is that Kim Jong Il has evinced a genius for propaganda ever since managing the efflorescence of his father’s cult in the 1960s. Even so, he cannot cover his lack of charisma completely; it’s as if Hitler died and left the Third Reich to Goebbels.

Kim must also be aware that the infantilization of the people has come at a price. Away from Pyongyang’s carefully monitored tourist sites, North Korea is a much more raucous place than any dictator could be comfortable with. “One surprising thing,” Michael Breen writes in Kim Jong Il: North Korea’s Dear Leader (2004), “surprising because you expect robots, is … how frequently fights break out.” According to refugees, even women fight out their differences, and young female teachers are said to hit children the hardest. This lack of restraint is a problem for many North Koreans trying to adjust to life in the South. Social workers complain that the refugees pick fights with strangers, and storm off jobs on the first day. “I’d have thought they’d be better at controlling themselves, coming from a socialist system,” is a common lament.

In short, the conventional Western view of North Korea’s official culture as a stodgy combination of Confucianism and Stalinism—two ideologies that prize intellectual self-discipline above all else—could not be further from the truth. Fortuitously enough, this view has so far encouraged Americans to stay cool in the face of Kim Jong Il’s missile-rattling. But misperceptions of hostile regimes are inherently dangerous, especially when Uncle Sam is doing the misperceiving, and this one has as much potential to excite tensions as to reduce them. On August 18, 1976, a detail of U.S. and South Korean soldiers at the DMZ were pruning a tree when People’s Army soldiers demanded that they stop. The Americans refused, prompting the North Koreans to wrest away their tools. In the ensuing clash two American officers were killed. Unable to conceive that Communist troops could act out of spontaneous rage, Washington assumed that Kim Il Sung had ordered the incident. Troops were set on high alert, and nuclear-capable B-52s dispatched to skirt North Korean airspace. Luckily for everyone, the Parent Leader issued an apology for his children on August 21. As the Americans saw it, of course, Kim had “backed down.”

Perhaps the most unsettling thing about the nuclear accord brokered by Jimmy Carter in 1994 is the decade of crowing it set off in North Korea. A high-school textbook remembers, “The Great Leader dragged the Americans, who had fallen into a state of extreme terror and unease, to the negotiating table … All problems discussed during the talks between America and Korea were resolved to Korea’s advantage, and the intense nuclear standoff ended in our victory.” This is evidently sincerely believed; if it weren’t, the North Koreans would not still be so enamored of Carter and Robert Gallucci, the chief U.S. negotiator back then. Both men—and this must thrill them no end—are praised in propaganda literature as fervent admirers of Kim Il Sung.

It is reassuring, then, to read in Harrison’s book that the agreement actually represented a victory of high-ranking North Korean “doves” over their hardline colleagues. I just wish he had explained why even the most hawkish propagandists remember it so fondly. What bothers me more is the author’s insistence on interpreting the two Kims’ every act as part of a rational pursuit of national security. We are told, for example, that the deployment of atomic weapons in South Korea in 1958 frightened Pyongyang into starting its own nuclear program. As the CWIHP bulletin makes clear, however, Eastern European diplomats in the early 1960s were aghast at the North Koreans’ assertions that a nuclear confrontation was nothing to be afraid of, and that the time had come for another invasion of the South. It is by no means certain that this sort of adventurist thinking has been abandoned. In a propaganda novel set in 1993, Kim Jong Il and his generals regard a likely American air strike on the Yongbyeon nuclear facility as the perfect opportunity for a “sacred war” (seongjeon) of reunification. Harrison ignores such things, which may well be better than overreacting to them; but to approach North Korea as if it were the détente-era Soviet Union is asking for trouble. When he gets his next update on the hawk-dove struggle from officials in Pyongyang, a city where most foreigners count themselves lucky to learn their tour guide’s name, he should perhaps keep in mind that North Korea has always viewed the existence of similar factions in Washington as the manifestation of a ludicrous disunity. No one under Kim Jong Il would describe his government in such terms to a Yankee visitor unless the goal were to extract more concessions from the outside world.

Considering that for decades the North Koreans refused to listen to their own allies, it seems naive for the author of Korean Endgame to assume that what Washington does “will largely determine what the North … will do.” The Juche regime has received substantial U.S. aid since the famine, but the dominant slogans of anti-American prop-aganda remain “A hundred thousand times revenge” and “A jackal can never become a lamb.” In other words, even as the regime tells the outside world it wants nothing but better relations with Washington, it tells its own people that better relations are neither desirable nor conceivable. In January of 2003 Pyongyang issued a taunting poster of a missile attack on the Capitol.Later that year, with the six-party talks in progress, an old tale of murderous missionaries was reprinted in four North Korean magazines, complete with racist caricatures.

Still, the thrust of Harrison’s book is valid.

The goal of the United States should be to disengage its forces gradually … over a period not longer than ten years, whether or not this can be done as part of a negotiated arms-control process … The stage would then be cleared, as it were, with the initiative left to Seoul and Pyongyang. Washington would have its hopes and its advice but would recede into an unaccustomed posture of detachment, ready to let the two actors make their own mistakes.

This is excellent counsel. Far from being a stabilizing factor on the peninsula, the U.S. presence serves only to rally the North Koreans around their military-first government. As Harrison makes clear, this is no time to get sentimental about our old ally. Seoul asks that U.S. troops stay, but at the same time it poses as a neutral mediator of the resulting tensions, often playing down the nuclear threat just as Pyongyang seems bent on playing it up; a disastrous miscommunication among the three parties seems all but preordained. It is a shame that Harrison does not place greater stress on the need to extricate our troops even if the arms-control process fails, because it’s hard to see how it can succeed. Kim Jong Il refused to let South Korean doctors tend to blinded children after the North’s railway explosion last spring; such a pathologically secretive man must be expected to balk at an early stage in the verification of nuclear dismantlement, no matter what agreement he has signed. Washington will then renege on its part of the bargain, prompting Seoul to voice regret over American “intransigence.” This, in turn, will embolden the North to demand a re-negotiation of the point in question, and we will all be right back where we started, albeit with even more nukes to worry about.

In the meantime, anything can happen. Having predicted the speedy downfall of the regime back in 1994, Pyongyang-watchers now predict that it will be around forever, but North Korea is already well into a precarious post-totalitarian phase. Thousands of citizens in border regions chat with refugees by smuggled cell phone, and millions more enjoy illegal access to television broadcasts from outside the country. The majority of the population has bought and sold things at open-air markets, and many young people in rural areas have simply stopped attending school and political meetings. The personality cult will find it hard to adjust to this kind of change without routine recourse to anti-American alarmism, and if there are no grounds for confrontation, Kim Jong Il can be expected to create them. All the more reason, then, for America to heed Harrison’s advice and pull out. But will we do so? Our patriotic dash into the Iraqi quagmire hardly inspires confidence that we wouldn’t follow our own Dear Leader into a new conflict in North Korea, especially since the WMD really do look like a “slam dunk” this time.

The only comfort to be had from the new batch of Korea books is provided by Breen’s biography of Kim Jong Il, which details a hedonistic streak as wide as the DMZ. Apparently the dictator lives in a huge palace stocked with Paradis cognac, and every summer a fresh “Joy Brigade” of high school beauties gets to admire the ceiling. Breen waxes indignant about this, but would he rather Kim were sharing a tent with a mountain goat and a well-thumbed Koran? We can all breathe a little easier knowing that our most formidable adversary wants his virgins in the here and now.

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North Korea Development Report 2003/04

Friday, July 30th, 2004

KIEP has published the North Korea Development Report 2003/04 (follow the link to download all several hundred pages!)

Summary: As a result of North Korea’s isolation from the outside world, international
communities know little about the status of the North Korean economy and its
management mechanisms. Although a few recent changes in North Korea’s economic system have attracted international interests, much confusion remains as to the characteristics of North Korea’s recent policy changes and its future direction
due to the lack of information. Therefore, in order to increase the understanding of readers in South Korea and abroad, KIEP is releasing The North Korea Development Report in both Korean and English. The motivation behind this report stemmed from the need for a comprehensive and systematic investigation into North Korea’s socio-economic conditions, while presenting the current status of its industrial sectors and inter-Korean economic cooperation. The publishing of this second volume is important because it not only supplements the findings of the first edition, but also updates the recent changes in the North Korean economy. The topics in this report include macroeconomics and finance, industry and infrastructure, foreign economic relations and inter-Korean economic cooperation, social welfare and science & technology.

This report also covers the ‘July 1 Economic Reform’ launched two years ago and
subsequent changes in the economic management system. The North Korea
Development Report helps to improve the understanding of the contemporary North
Korean economy.
Table of Contents  
 
Part I Macroeconomic Status and Finance
Chapter 1 Current Status of the North Korean Economy and Its Prospects
Chapter 2 National Financial Revenue and Expenditure
Chapter 3 Banking and Price Management

Part II Industrial Management and Problems
Chapter 4 The Industrial Sector
Chapter 5 The Agricultural Sector
Chapter 6 Social Overhead Capital
Chapter 7 Commerce and Distribution Sector
Chapter 8 The Defense Industry

Part III International Economic Activities
Chapter 9 Foreign Economic Relations
Chapter 10 Special Economic Zones
Chapter 11 Inter-Korean Economic Relations

Part IV Social Security and Technology Development
Chapter 12 Social Security and Social Services
Chapter 13 Science and Technology Sector

Part V The Recent Economic Policy Changes
Chapter 14 The Contents and Background for the Recent Policy Changes
Chapter 15 The Features and Problems of the Recent Economic Policy Changes
Chapter 16 Prospects and Future Tasks of the July 1 Economic Reform  

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Foreign investors brave North Korea

Tuesday, April 13th, 2004

BBC
Lucy Jones
4/13/2004

“Got any nuclear weapons for sale?” is the response Briton Roger Barrett usually gets when he tells people at Beijing cocktail parties that he invests in North Korea.
The country’s admission to a nuclear weapons programme and its listing on George W Bush’s “axis of evil” means most people are staying well away.

But Mr Barrett, 49, a former troop commander in the British army who has 10 years experience of doing business in North Korea, recently opened a branch of his consultancy firm, Korea Business Consultants, in Pyongyang.

A self-confessed “business adventurer”, he says there is growing interest in the country after Chairman Kim Jong-il introduced economic reforms in 2002.

It’s like China in the eighties… The market reforms are very evident. It’s an exciting time to join the market.

Robert Barrett, Korea Business Consultants 
He is also the enthusiastic publisher of what must be North Korea’s only business publication – the DPRK Business News Bulletin – which features some of the 250 companies he advises.

“It’s like China in the eighties… The market reforms are very evident. It’s an exciting time to join the market,” he says.

Mr Barrett is not alone.

Even in the middle of a nuclear crisis there are foreign investors in the country, and their numbers are increasing.

They say North Korea is a mineral rich country that needs everything and insist they have to get there first.

They also believe the 2002 economic reform is for real and that the country is gradually moving towards becoming a market economy.

Poverty

The little data there is on the country’s economy is hardly encouraging, though.

There has been a devastating famine and the UN says malnutrition is still widespread.

There are chronic heating and water shortages, and most North Koreans are paid less than £5 a month.

The country also has an appalling human rights record.

A BBC documentary on the country’s gulags this year contained allegations that chemical experiments are being carried out on political prisoners.

Meanwhile, the US says it is “highly likely” that North Korea is involved in state-sponsored trafficking of heroin.

In the political arena, the second round of six-nation talks aimed at resolving the nuclear crisis ended in Beijing in February without agreement, which means US and Japanese sanctions will remain in place.
‘Communism’ tourism

But the foreign entrepreneurs in North Korea are not put off.

Some are helped by UN employees who have worked in Pyongyang (among the few people to have had contact with the regime there) and many have a track record in China.

Pack a torch, conduct business meetings on the street to avoid big brother listening in and have plenty of “Asian patience” for the endless red-tape, they advise.

An Austrian company is reportedly buying pianos from the North Koreans, a French television station uses North Korean artists to produce cartoons, while a Singapore-based firm is developing forestry and tourism.

The Singaporeans intend to offer “adventure” stays on their North Korean forestry plantations.

Meanwhile, Western tourist agencies are gearing up to offer the last chance to see communism in action, and Fila and Heineken have reportedly entered into sponsorship deals with the North Korean regime.

North Korean labour

A German, Jan Holtermann owner of the computer firm KCC Europe, is putting North Korea online.

He hopes that by being there first he will be able to eventually tap into North Korean computer talent.

The country’s small number of internet users currently dial-up to Chinese providers, a costly process at about £1 a minute.

Mr Holtermann’s customers, who he hopes will number 2,000 by the end of the year, will have unlimited access for £400 a month.

As only a few North Koreans are permitted to have telephones, and as the internet service is costly, Mr Holtermann expects his customers to be government ministries, news agencies and aid organisations.

He has invested £530,000 in the venture, intending to get first pick when North Korean software programmers come onto the market.

“They are very talented,” he says.

“It’s this capacity we want to sell in Europe.”

The parcel delivery company DHL has operated in Pyongyang since 1997, when it was invited there by the government, and now has North Korean light manufacturing, textile and beverage companies on its books.

It sees itself as contributing to the country’s “slow but increasingly visible” economic reform programme.

British consultants

Former bank employee Mr Barrett is convinced North Korea is opening up much quicker than people think.

There are opportunities in banking, minerals, agriculture and telecommunications, he insists.

“There is the odd story of something going wrong,” he says.

“But when you walk around you notice construction going on.

“The people are feeling a change.”

High level contacts

But how to do business with one of the most isolationist regimes on earth?

Contacts are essential, say businessmen.

Though even knowing a North Korean minister is not enough, says Gerald Khor of Singapore-based forestry company Maxgro Holdings.

“You have to go above the ministers to the cabinet. You don’t have to know a member but you need to know people who can influence them,” he says.

“It is very important to get the favour of the dear leader (Kim Jong-il). Because when he says something, it gets done.”

Through a former UN employee, Maxgro got Kim Jong-il’s attention and has invested $2m in forestry, agreeing the state gets 30% of the profits.

“Kim Jong-il is an environmentalist,” Mr Khor says.

“We are confident we’ll get a return.

“We have dwindling supplies and this is high quality wood.”

To locate the forests elsewhere would cost much more, he adds.

Forced to change

Economic reforms introduced by the government in 2002 are seen as the first move away from central planning since the country adopted communism in 1945.

The government has been forced to change in order to survive, especially now it can no longer barter with Eastern Europe and the former Soviet Union, experts say.

“There is no real option not to carry out these reforms,” says UK-based Keith Bennett, who has taken trade missions to Pyongyang.

“But people don’t know where they will lead.

Chinese leaders have impressed on Kim Jong-il that there can be economic reform without fundamental political change.”

Way up on North Korea’s border with Russia and China is the Tumen economic zone, which was established in 1991 with UN help to lure investors.

The project has only had limited success and may indicate the type of problems those investing elsewhere in North Korea may face.

The North Korean section of the zone, Rajin-Songbong, hosts foreign-run hotels, telecommunications and restaurants, but that is about all.

“The North Koreans have sometimes been very co-operative and sometimes not, maybe because of policy change,” says Tsogtsaikhan Gombo, from the UN’s development agency.

“They were also disappointed when they didn’t see the investment.”

Vibrant Chinese economic zones nearby have put up fierce competition.

But even opening the door just slightly to let in capitalism has greatly improved the lives of the 150,000 people living in the zone, says Mr Gombo.

And many foreigners insist that small investments elsewhere in the country may have similar results.

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Through a glass, darkly

Thursday, March 11th, 2004

The Economist
3/11/2004

So far as a visitor can tell in this secretive land, North Korea’s economic reforms are starting to bite. But real progress will require better relations with the outside

COMMUNIST North Korea has started to experiment with economic reform, and opened its door a crack to the outside world. Though its culture of secrecy and suspicion stubbornly persists, it was deemed acceptable for your correspondent to visit Pyongyang’s Tongil market last week. Here, stalls are bursting with plump vegetables and groaning with stacks of fresh meat. You can even buy imported pineapples and bananas from enthusiastic private traders.

But how about a photograph? Most foreigners think of North Korea as a famished nation, and the authorities are evidently keen these days to tell the world about the great strides their economy has made since reforms were introduced in July 2002. Logic might seem to suggest that a snap showing the palpable result of the reforms would be acceptable too. But it is not. The officials were friendly but firm: no pictures of fat carrots.

The July 2002 reforms were ground-breaking for North Korea: the first real step away from central planning since the dawn of communism there in 1945. The government announced that subsidies to state-owned enterprises were to be withdrawn, workers would be paid according to how much they produced, farmers’ markets, hitherto tolerated, would become legal and state enterprises would be allowed to sell manufactured products in markets. Most of these enterprises, unless they produced “strategic items”, were to get real autonomy from state control.

Almost two years on, how to assess the success or failure of these reforms? That climate of secrecy makes it deeply frustrating. Even the simplest of statistics is unavailable. Li Gi Song, a senior economist at Pyongyang’s Academy of Sciences, says he does not know the rate of inflation. Or maybe he is not telling. After all, he says, “We can’t publish all the figures because we don’t want to appear bare before the United States. If we are bare then they will attack us, like Afghanistan or Iraq.” So what follows can be little more than a series of impressions.

The indications are that the reforms are having a big impact. For a start, North Korea has recently acquired its first advertisement (pictured above)—for foreign cars, assembled locally by a South Korean majority-owned company. Or, to be more basic, take the price of rice, North Korea’s staple. Before the reforms, the state bought rice from state farms and co-operatives at 82 chon per kilo (100 chon make one won, worth less than a cent at the official exchange rate). It then resold it to the public through the country’s rationing system at eight chon. Now, explains Mr Li, the state buys at 42 won and resells at 46 won.

North Korea’s rationing system is called the Public Distribution System (PDS). Every month people are entitled to buy a certain amount of rice or other available staples at the protected price. Thus most North Koreans get 300g (9oz) of rice a day, at 46 won a kilo. According to the UN’s World Food Programme (WFP), that is not nearly enough. Anything extra has to be bought in the market.

In theory, even in the market the price of staples is limited. Last week, the maximum permitted rice price was marked on a board at the entrance to Tongil as 240 won per kilo. In fact, it was selling for 250. WFP officials say that in January it was selling for 145 won, which points to significant inflation, for rice at least. This is not necessarily a bad thing, since it means that the price is coming into line with the market.

The won’s international value is also adjusting. Since December 2002, the euro has been North Korea’s official currency for all foreign transactions. In North Korean banks, one euro buys 171 won. In fact, this rate is purely nominal. A semi-official rate now exists and the price of imports in shops is calculated using this.

Last October, according to foreign diplomats, a euro bought 1,030 won at the semi-official rate. Last week it was 1,400. A black market also exists, in which the euro is reported to be fetching 1,600 won—which implies that the won is approaching its market level. It also means, however, that imported goods have seen a big price-hike. For domestically-produced goods, like rice, prices may well go on rising for a good while longer.

What about earnings? Before the 2002 reforms, most salaries lay in the range of 150-200 won per month. Rent and utilities, though, were virtually free, as were (and are) education and health care. Food, via the PDS, was virtually given away. Now, pay is supposed to be linked to output, though becoming more productive is not easy for desk-bound civil servants or workers in factories that have no power, raw materials or markets.

Rents and utilities have gone up, though not by crippling amounts. A two-bedroom flat in Pyongyang including electricity, water and heat costs just 150 won a month—that is, about a tenth of a euro.

Earnings have gone up much more: a waitress in a Pyongyang restaurant earns about 2,200 won a month. A mid-ranking government official earns 2,700. A worker at a state farm earns in the region of 1,700, a kindergarten teacher the same, and a pensioner gets between 700 and 1,500. A seamstress in a successful factory with export contracts can earn as much as 5,000 won a month. Since that seamstress’s pay equates to barely three euros a month, wages still have a long way to adjust.

The prices of food and other necessities, to say nothing of luxuries, has gone up much more than rent has. According to the WFP, some 70% of the households it has interviewed are dependent on their 300 gram PDS ration, and the WFP itself is targeting 6.5m vulnerable people out of a total population of some 23m. Not all suffer equally: civil servants in Pyongyang get double food rations from the PDS.

There are some encouraging stories. In Pukchang, a small industrial town 70km (40 miles) north-east of Pyongyang, Concern, an Irish aid group, has been replacing ancient, leaking and broken-down water pipes and pumps, and modernising the purification system. This has pushed the amount of clean water available per person per day from 80 to 300 litres. Kim Chae Sun is a manager at the filtration plant, which is now more efficient. Before July 2002 she earned 80 won a month. Afterwards she earned 3,000 won. Now she earns 3,500.

As Mrs Kim speaks, three giant chimneys belch smoke from the power station that dominates the town. All workers have been told they can earn more if they work harder, but certain groups have been told they will get even more money than everyone else. In energy-starved North Korea these include miners and power workers. Mrs Kim says her husband, who works in the power plant, earns an average of 12,000 won a month. Her rent has gone up from eight to 102 won a month, and in a year, she thinks, she will be able to buy a television or a fridge.

A lot of people, in fact, are buying televisions. The women who sell the sets from crowded Tongil market-stalls get them from trading companies which they pay after making a sale. The company price for an average set is 72,000 won, the profit just 1,000 won. After they have paid for their pitch, the traders can expect an income of 10,000-12,000 won a month.

Mystery sales
Which makes for a puzzle. Who can afford a good month’s salary for a locally made jacket in Tongil, costing 4,500 won? How come so many people are buying televisions, which cost more than two years of a civil-servant’s pay? How come the number of cars on the streets of the capital has shot up in the past year? Pyongyang still has vastly less traffic than any other capital city on earth, but there are far more cars around than a year ago. Restaurants, of which there are many, serve good food—but a meal costs the equivalent of at least a white-collar worker’s monthly salary. Many of these restaurants are packed.

Foreign money is part of it. Diplomats and aid workers say many new enterprises seem to have opened over the last year. Nominally they are state-owned, but sometimes they have a foreign partner, often an ethnic Korean from Japan. The majority are in the import-export business. Some have invested in restaurants and hotels and some in light industry. Thanks to the 2002 reforms, these firms have a degree of autonomy they could not have dreamed of before. An unknown number of people also receive money from family abroad, but there are still no North Korean-owned private companies.

Farmers are among the other winners: they can sell any surpluses on the open market. But two out of three North Koreans live in towns and cities, and only 18% of the country is suitable for agriculture. The losers include civil servants, especially those outside Pyongyang who do not get double food rations and have no way to increase their productivity.

Factory workers have it the hardest. A large proportion of industry is obsolete. Though Pyongyang has electricity most of the day, much of the rest of the country does not. Despite wild talk of a high-tech revolution, the country is not connected to the internet, though some high-ups do have access to e-mail service. In the east of the country lies a vast rustbelt of collapsing manufacturing plants.

Huge but unknown numbers of workers have been moved into farming, even though every scrap of available land is already being cultivated. The extra workers are needed because there is virtually no power for threshing and harvesting and no diesel for farm vehicles. This requires more work to be done by hand. Ox-carts are a common sight.

The innocent suffer
Markets are everywhere. But this does not mean that there is enough food everywhere. In Pyongyang, where there are better-off people to pay for it, there is an ever-increasing supply. Outside the capital, shortages are widespread.

No one knows how many died during the famine years of 1995-99; estimates range from 200,000 to 3m. In Pukchang, officials say that 5% of children are still weak and malnourished. In Hoichang, east of Pyongyang, schools and institutions tell the WFP that about 10% of children are malnourished. Masood Hyder, the senior UN official in North Korea, says that vulnerable households now spend up to 80% of their income on food.

And yet some things are improving. Two surveys carried out in 1998 and 2002 by the North Korean government together with the WFP and Unicef showed a dramatic improvement in children’s health between those years. The proportion of children who fail to reach their proper height because of malnutrition fell from 62% to 39%, and the figures are thought to be still better now. However, Unicef says that though children may no longer die of hunger, they are still dying from diarrhoea and respiratory diseases—which are often a side-effect of malnutrition.

To a westerner’s eye, a class of 11-year-olds in Hoichang is a shocking sight. At first, your correspondent thought they were seven; the worst-affected look to be only five. Ri Gwan Sun, their teacher, says that apart from being stunted some of them still suffer from the long-term effects of malnutrition. They struggle to keep up in sports and are prone to flu and pneumonia. They are also slower learners.

Pierrette Vu Thi of Unicef says that North Korea’s poor international image makes it hard for her agency, the WFP and others to raise all the money they need. The country is in a chronic state of emergency, she says, and to get it back on its feet it would need a reconstruction effort on the scale of Afghanistan and Iraq.

Such bleak talk is echoed by Eigil Sorensen of the World Health Organisation. He says that health services are extremely limited outside the capital. Medicines and equipment are in short supply, large numbers of hospitals no longer have running water or heating and the country has no capacity to handle a major health crisis.

None of this is likely to change very fast. With no end yet to the nuclear stand-off between North Korea and the United States, American and Japanese sanctions will remain in place. And nukes are only part of it. Last week the American State Department said it was likely that North Korea produced and sold heroin and other narcotics abroad as a matter of state policy. North Koreans who have fled claim that up to 200,000 compatriots are in labour camps. North Korea denies it all.

Reform, such as it is, has plainly made life easier for many. But rescuing the North would take large amounts of foreign money, as well as measures more far-reaching than have yet been attempted. At present, there is no way for the government to get what it needs from international financial institutions like the World Bank. Such aid as comes will be strictly humanitarian, and investment in so opaque a country will never be more than tentative. Domestic reform on its own cannot fix an economy wrecked by decades of mismanagement and the collapse of communism almost everywhere else.

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