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N.Korea still expects payment for summit

Friday, February 26th, 2010

Choson Ilbo
2/26/2010

North Korea is still demanding rice and fertilizer in return for an inter-Korean summit, even as it keeps sending increasingly urgent messages to Seoul to bring such a summit about.

Since a secret meeting between South Korean Labor Minister Yim Tae-hee and Kim Yang-gon, the director of the North Korean Workers’ Party’s United Front Department, in Singapore in October, “North Korea has kept asking us for a huge amount of economic aid in return for arranging a meeting” between President Lee Myung-bak and North Korean leader Kim Jong-il, a South Korean government source said on Thursday.

But the North seems to have no interest in giving in to South Korean demands to put denuclearization and the repatriation of prisoners of war and abduction victims on the summit agenda. “The North basically wants economic gain in return for letting us make political use of an inter-Korean summit for the upcoming local elections” on June 2, the source said. “It seems that the North still feels nostalgic for the Sunshine Policy,” which netted it huge benefits over the past decade.

The first inter-Korean summit in 2000 was announced only three days before the general election and was bought through a secret payment of billions of won. The second summit in 2007 was announced two months before the presidential election. Since 2000, the North has received more than 300,000 tons of rice and the same amount of fertilizer almost every year worth more than W1 trillion (US$1=W1,163) a year.

In another secret meeting between South Korea’s Unification Ministry and the North Korean Workers’ Party’s United Front Department in November, the North again insisted on specifying humanitarian aid in an agreement to be signed at an inter-Korean summit.

A “tree planting campaign for North Korea” initiated recently by the Presidential Committee on Social Cohesion also reportedly went awry because the North demanded a huge aid of food in return for letting South Korea plant trees there.

Kim Jong-il is apparently not aware that Seoul is serious about ending this cash-for-summits policy. A South Korean government official with experience in inter-Korean talks said, “At secret meetings, each side often had its own way of interpreting agendas. Maybe North Korean delegates who are accustomed to the Sunshine Policy are trying to interpret the current government’s messages the way they did with past governments.”

It seems the North has attempted to earn economic aid worth W1 trillion by prevaricating over the issue of the POWs and abduction victims, offering to handle it like part of reunions of separated families, and discussing the nuclear issue only with the U.S.

Whether the attitude will change remains to be seen. The North is now in a worse economic situation than before in the wake of a recent disastrous currency reform on top of international sanctions and a severe food shortage.

Prof. Cho Young-ki of Korea University said, “The North is in dire need of support from the outside including South Korea to stabilize the regime for a smooth transition of power” to Kim’s son Jong-un. “It is possible that the North will reluctantly accept our request depending on progress in the six-party nuclear talks.”

The government believes that a dramatic turning point in inter-Korean relations could be reached if the North makes “big decisions” in the nuclear or POW issues, according to Kim Tae-hyo, the presidential secretary for foreign strategies.

Posted in Agriculture statistics, Foreign aid statistics, Inter-Korean summit, International Aid, Political economy, South Korea, Statistics | Comments Closed

N.Korea received 300,000 tons of food aid in 2009

Wednesday, February 24th, 2010

According to the Choson Ilbo:

North Korea is believed to have been given 300,000 tons of food either on credit or as aid last year, mostly from China, the Unification Ministry told the National Assembly’s Foreign Affairs, Trade and Unification Committee on Tuesday. That is enough to feed the entire population of North Korea for a month.

The UN Food and Agriculture Organization on Monday said North Korea faces a shortage of 1.25 million tons of food, but that did not take into account the amount provided by China and other countries. Unification Ministry Hyun In-taek said, “North Korea has been suffering from problems in food supply and distribution since its currency reform and has been taking measures to deal with the situation.”

Read the full article here:
N.Korea Took 300,000 Tons of Food Aid Last Year
Choson Ilbo
2/24/2010

Posted in Agriculture statistics, China, Food, Foreign aid statistics, RoK Ministry of Unification, Statistics | Comments Closed

DPRK government delivering rice to high risk areas

Tuesday, February 23rd, 2010

Daily NK
Jung Kwon Ho
2/22/2010

In late January, Kim Jong Il held a meeting of his highest officials, including Jang Sung Taek, Director of the Ministry of Administration of the Party, aiming to find ways to alleviate the negative side effects of November’s currency redenomination. In the meeting, the group apparently agreed to release emergency supplies of rice to those on the brink of starvation.

According to a Daily NK source, “Following the meeting, which he chaired, Kim Jong Il handed down a handwritten decree to the chief secretaries of all provinces on January 20 in which it was stated, ‘Preventing anyone from starving to death is your obligation.’”

Chief Secretaries of Provincial Committees of the Party, the recipients of the decree, handed on the threat to their subordinates, warning provincial cadres, “You will resign if anyone starves to death, because this was a direct instruction from the General.”

In the decree, the three most vulnerable provinces were named as Yangkang, South Hamkyung, and Kangwon Provinces, so the officials governing those provinces are understandably nervous. They are the provinces where most casualties occurred during the March of Tribulation, and they remain the most food insecure.

Under the decree, the Ministry of Procurement and Food Policy makes daily deliveries of 5kg of relief rice to each people’s unit and 5-15kg to each factory and enterprise. Chairpersons of people’s units and managers of factories are required to observe the circumstances of the people under their control and provide those in the greatest danger of starvation with relief rice first.

In late January, quite a number of households were reportedly facing starvation due to the aftermath of the currency redenomination; notably sky high prices coupled to strict market regulations. However, there have been no reports of starvation since relief rice deliveries began on February 1.

Alongside the chairpersons of People’s Units, cadres working for local government offices are required to cross-check whether or not starvation is occurring. In theory, they are reprimanded if they do not report the situation truthfully.

Upon hearing the news, a defector in Seoul commented, “It seems that the people will not lie still and suffer that dire situation. Kim Jong Il may have done this because he senses a crisis situation this time.”

Posted in Agriculture, Agriculture statistics, Banking, Finance, Fiscal & monetary policy, Food, Ministry of Administration, Ministry of Procurement and Food Policy, Political economy | Comments Closed

The DPRK’s 2008 census: results and analysis

Sunday, February 21st, 2010

Thanks to a responsive employee at the UNFPA, I obtained a summary of the DPRK’s census findings. You can download the summary here.

Thanks to a reader I was able to obtain a copy of the entire census data set. You can download it here.

Both documents have been added to the “DPRK Economic Statistics Page“. Happy reading.

_________________

UPDATE 1: The Wall Street Journal’s Evan Ramstad published some analysis of the DPRK’s 2008 census data. According to the article:

North Korea is getting bigger, older and less healthy, according to data from the country’s latest census, and its fabled million-man army might have fewer than 700,000 people.

The authoritarian government in December released results of the census conducted in 2008, saying its population had climbed to 24 million people from 21.2 million in the previous census in 1993.

More details have been published by the United Nations Population Fund, which helped North Korea conduct the census and sent five teams of observers to monitor it.

Even so, it’s difficult for outsiders, with so little access to the country, to be certain of the precision of North Korea’s data. For decades, the government has cut off the dissemination of most information about the country. The new census numbers provide a rare glimpse of official statistics.

The census reported that North Korea’s population grew at an annual average rate of 0.85% for the 15-year period, a time that included a devastating multiyear famine that analysts and foreign aid agencies estimate killed between one million and two million people.

A separate U.N. report published last year found that North Korea’s population has grown more slowly since 2005, at an annual rate of 0.4%. The global population has grown 1.2% annually since 2005, the U.N. report said.

North Korea’s census said the country’s population has proportionately fewer children and more middle-aged people than it did in 1993.

It also reported that people are less healthy.

Babies are more likely to die: The infant mortality rate climbed to 19.3 per 1,000 children in 2008 from 14.1 in 1993, though North Korea’s rate is still well below the world average, which a 2009 report by the U.N. agency put at 46 per 1,000 children.

North Koreans are living shorter lives—average life expectancy has fallen to 69.3 years from 72.7 in 1993.

As in many places, women live longer than men, with a gap of about seven years, compared with the world average of 4.4 years.

North Korea has 5.9 million households, with an average of 3.9 people in each, according to the census.

The typical home is 50 to 75 square meters in size (540 to 800 square feet). About 85% of homes have access to running water and about 55% have a flush toilet.

The census provided only a glimpse of the country’s economic structure, but even that produced some surprises. The occupation that provides the most employment—farming—has more women, 1.9 million, than men, 1.5 million.

The second-biggest occupation, working for the government or the military, employs 699,000 people. The census doesn’t break that group down further, but the figure suggests North Korea’s military isn’t as large as had been thought.

The military is often portrayed by outside military analysts and media as a force of one million people, mostly conscripts who are required to serve 10 years.

The third-largest employment sector by number of workers is education, followed by machinery manufacturing, textiles and coal mining. About 40,000 people work in computer, electronic or optical-product manufacturing.

North Korea hasn’t shared meaningful information about its economy or its financial system with the outside world since the early 1960s.

Outside estimates of its economic performance, most prominently an annual estimate by the South Korean central bank, the Bank of Korea, are filled with assumptions that even their authors say render them almost meaningless.

Word of the availability of the North Korea census data was disseminated last week on North Korea Economy Watch, a Web site run by Curtis Melvin, a Virginia-based graduate student in economics and a specialist in North Korea.

Read the full article here:
Pyongyang Reports an Aging, Less Healthy Population
Wall Street Journal
Evan Ramstad
2/20/2010

UPDATE 2 (1/12/2011): According to the Choson Ilbo:

Each year, Statistics Korea publishes population figures for North Korea in a booklet based on surveys conducted by international organizations like the UN and data released by the Education Center for Unification under the Unification Ministry.

Most of these statistics were compiled based on a census the North took in 2008 with the UN’s help.

North Korea’s only previous census was in 1993, which established that the population is 21.21 million. Although rumor has it that several millions of people starved to death during the famine of the 1990s, nobody knows how many exactly died.

The second census in 2008 was taken with funds provided by the UN Population Fund to obtain basic data for humanitarian aid to the North. The North accepted the offer, presumably because it wanted a good grasp of the reality to develop its own economy.

The census lasted for 15 days, from Oct. 1 to 15, 2008. The North’s Central Statistics Bureau surveyed 5,587,767 households nationwide by mobilizing a total of 35,000 census takers through municipal and provincial statistics offices. The questionnaire consisted of 53 questions about income, furniture, electronic home appliances, toilets, heating system, and tap water and sewage facilities, as well as basic personal information such as age and gender.

Like in South Korea, the North Korean census takers visited homes to ask the questions face to face. Statistics Korea officials flew to China, where they taught North Korean officials census methodology and techniques, and the South gave the North as much as US$4 million for the census from the Inter-Korean Cooperation Fund.

According to the census, the North’s population was 24,062,000, up 2.85 million from 1993. Average life expectancy was 69.3 years, and infant mortality was 19.3 per 1,000. But these data are quite different from UN estimates, which put life expectancy at 67.3 years and infant mortality at 48 per 1,000. The credibility of the North’s census data has not been verified.

Posted in Agriculture statistics, Demographics, Emigration statistics, Foreign aid statistics, GDP statistics, Statistics, Trade Statistics, UN, UN Population Fund | 12 Comments »

Food shortage worsens in N. Korea

Wednesday, February 10th, 2010

According to Yonhap:

North Korea’s food shortage is expected to further worsen this year, as the communist state’s grain output in 2009 is believed to have fallen from the previous year, a government official in Seoul said Wednesday.

The North is estimated to have produced 4.1 million tons of grain last year, a drop of about 200,000 tons compared to 2008, the Unification Ministry official said on condition of anonymity.

Read the full article here:
Food shortage worsens in N. Korea: official
Yonhap
2/10/2010

Posted in Agriculture, Agriculture statistics, Food, Statistics | 1 Comment »

North Korea’s Failed Currency Reform

Sunday, February 7th, 2010

Marcus Noland wrote an op-ed for the BBC which is posted on the Peterson Institute web page. There are some differences in the two (the BBC piece is shorter), so you can read whichever you prefer. Below, however, I have posted the graphs from the Peterson Institute web page with some commentary:

This chart indicates the market for rice was surprisingly efficient before the currency conversion. Over a two year window, the observed price seems remarkably stable (although the scale of the graph makes it hard to see the the actual level of price volatility). Still, it seems fair to say that North Korean rice producers, vendors, and smugglers are quick to spot and eliminate regional price differentials through arbitrage. The supply of rice must also be highly highly elastic. If the North Korean economy was experiencing inflationary pressures in this time, productivity gains and competition would have to have kept the nominal price essentially flat and caused the real price of rice to fall!

The price of corn is somewhat more volatile and I would be interested in hearing theories as to why this is.

This chart is surprising as well. We see a highly stable US Dollar/DPRK won black market exchange rate (though again, the scale of the graph makes it difficult to determine just how stable). Although the DPRK has not published its monetary policy goals (as far as I am aware), I think it is fair to say that the North Koreans practice exchange rate targeting. Most likely the target is not the US dollar, but the Chinese yuan–which trades at a nearly constant level with the US dollar. Since China is the DPRK’s largest trading partner, it would make sense that the authorities would aim for exchange rate stability. This would suggest, however, that the DPRK’s monetary authorities are well aware of the black market value of their currency and have the tools to affect the exchange rate (i.e. lots of RMB reserves to sell on the black market). I am not sure how plausible this is, but I am not sure how else we can explain this level of exchange rate stability.

Posted in Agriculture, Agriculture statistics, Fiscal & monetary policy, Food, Peterson Institute | 5 Comments »

DPRK claims food output at 5 million tons

Sunday, December 27th, 2009

According to the Choson Ilbo:

North Korea in late October informed the UN its food output this year was 5.01 million tons, it emerged on Tuesday. The yield included 2.34 million tons of rice, 1.7 million tons of corn, 560,000 tons of potatoes, 240,000 tons of wheat and barley and 150,000 tons of beans.

The figure represents an increase of 330,000 tons over the 4.68 million tons the North claimed last year. The original estimate was about 4 million tons.

North Korea’s rice harvest increased this year thanks to little harm from floods and droughts, according to North Korea sources. Corn output was poor due to cold-weather damage in the border region with China and Kangwon Province. “Kim Jong-il appears to have carried out the shock currency reform out of confidence that the food situation next year won’t be worse than expected,” speculated a source.

If it is not in urgent need of food aid, the North can afford to be tougher in its dealings with the South and the U.S. for the time being. But there is a chance that the North exaggerated the food output in a bid to demonstrate the success of a “150-day struggle” and a “100-day struggle” where people were swept off urban streets and forced into labor on the collective farms.

With 5.01 million tons of staples, the North would face little problem in feeding its population of 24 million for a year. Its late leader Kim Il-sung once said, “Daily food consumption is about 10,000 tons. If we had 5 million tons of grains a year, we would be able not only to dole out food rations but feed the people with sugar and candy.”

But the food shortage in the North arises not only from a chronic quantitative shortfall but also from uneven distribution and supply. The authorities place priority in food supply on the party and the military. The burgeoning merchant class can also manage. But the old, the weak and the urban poor, estimated at 10 to 20 percent of the population, are marginalized. “Organizations aiding North Korea also need to improve monitoring of distribution,” said a South Korean government official.

Meanwhile, the UN Food and Agriculture Organization said the grain output North Korea informed it of in mid-November was 3.53 million tons. A source said this was because potatoes and beans, which are included in ordinary grain yield estimates, were omitted. “The aim may be to get the maximum possible food aid from the international community,” the source speculated.

Previous posts citing DPRK agriculture statistics can be found here.

Previous posts about the DPRK’s agriculture policies and outcomes can be found here.

Previous posts about the DPRK’s food situation can be found here.

Read the full article here:
N.Korea’s Claims Food Output of 5 Million Tons
Choson Ilbo
12/23/2009

Posted in Agriculture, Agriculture statistics, Food, Statistics | Comments Closed

Bank of Korea releases 2008 DPRK economic stats

Sunday, June 28th, 2009

North Korea doesn’t release official economic data. Since 1991, the South Korean central bank has released its own estimates of the North Korean economy to fill the void. Its figures are derived from information provided by the ROK’s National Intelligence Service and other sources. The 2008 statistics can be downloaded here.

According to coverage by the Associated Press:

The North’s gross domestic product for last year was estimated at $24.7 billion, a 3.7% increase from 2007, Seoul’s Bank of Korea said in a news release. The impoverished North’s economy shrank 2.3% in 2007 and 1.1% in 2006.

The central bank said the North’s economic growth was mainly because of “temporary factors” such as favorable weather conditions that resulted in an increase in agricultural production, and the arrival of oil shipments under an international disarmament deal on its nuclear program.

The size of North Korea’s economy, however, was still about 2.6% of South Korea’s, the bank said, adding it was “difficult” to determine whether last year’s growth means the country’s internal economic conditions have improved.

The bank said the North’s agricultural production increased 10.9% last year compared with 2007. The production of coal, iron ore and other minerals expanded 2.3% and the manufacturing industry 2.5%.

…and BBC coverage:

Agricultural production rose nearly 11% in 2008 compared with 2007. And coal, iron ore and other mineral production grew 2.3% for the year.

UPDATE from Business Week:

The surprise underscores the tiny size of the North Korean economy, which could be easily swayed by such factors as weather and outside assistance. Just over two-thirds of the 3.7% growth came from the agricultural sector, and that is heavily dictated by weather. North Korea’s agricultural output increased by 10.9% in 2008 after falling by 12.1% in the previous year as it managed to escape from major floods and drought. Its 2008 manufacturing production also grew by 2.5%, compared with a gain of a mere 0.8% in 2007, thanks to heavy oil supplies by the U.S. and its allies as a result of Pyongyang’s agreement last year to begin dismantling its nuclear facilities.

Even as hope builds in South Korea about a recovery, with the U.S. and China showing signs of revival, prospects for North Korea’s economy are looking grimmer. North Korea’s nuclear test in May and the regime’s missile tests this year have led to an end to outside help and economic sanctions by the U.N. This heralds a poor performance in the manufacturing sector, which will almost certainly face an acute shortage of oil and electricity this year.

Pyongyang can’t count on the agricultural industry for any major contribution to economic growth in 2009, either. Even if North Korea manages to maintain the 2008 grain output of 4.3 million tons, which will be difficult to achieve unless last year’s exceptionally good weather is repeated, it won’t help the economy grow as it starts from a high base.

Those factors make North Korea’s economic growth last year an anomaly. “There’s no indication that North Korea’s growth engine has improved in any fundamental way,” says Bank of Korea economist Shin Seung Cheol. Even with last year’s extraordinary growth, North Korea’s gross domestic product was 1/38 of South Korea’s $935 billion and its trade volume was 1/224 of the South’s $857.3 billion in 2008. As long as North Korea’s reclusive leader Kim Jong Il refuses to open up his country, the gap is bound to keep expanding.

I have collected the most commonly referenced North Korean economic statistics here.

Read more here:
South Korea’s Central Bank Says North’s Economy Grew in 2008
Associated Press
6/28/2009

North Korea’s GDP Growth Better Than South Korea’s
Business Week
Moon Ihlwan
6/30/2009

Posted in Agriculture, Agriculture statistics, Construction, Demographics, Electricity, Energy, Forestry, GDP statistics, Light Industry, Manufacturing, Mining/Minerals, Statistics, Trade Statistics | 1 Comment »

UNICEF maintains operations in DPRK

Wednesday, June 3rd, 2009

Although the UN World Food Program was asked to leave the DPRK in March, along with US relief workers, the UN children’s fund (UNICEF) is still distributing relief supplies. Additionally, the UNDP is about to resume activities. According to Yonhap:

The U.N. children’s agency said Wednesday its humanitarian aid operations in North Korea remain steady amid diplomatic tensions, and that Pyongyang will soon sign an agreement to allow a nationwide nutritional survey.

“The situation with regard to access and monitoring is the same as it has been in the past,” Gopalan Balagopal, UNICEF representative in Pyongyang, said in an email interview.

“UNICEF undertakes regular field visits to monitor progress of work and holds periodic review meetings with counterparts,” he said.

…

As part of efforts to improve the health of North Korean children and mothers, the agency will soon sign an agreement with the North Korean government to conduct a nutritional survey across the country, set to start in October, Balagopal said.

“We are finalizing a memorandum of understanding with the government shortly for going ahead with a multiple indicator cluster survey, which will have a nutrition component,” he said.

Another aid agency, the U.N. Development Program, is also preparing to restart its program in North Korea after a two-year hiatus, he said. Four UNDP members came to Pyongyang on May 19, and two of them are staying there, keeping “busy with work for restarting their program,” Balagopal said.

UNDP withdrew from Pyongyang in early 2007 after suspicions arose over North Korea’s misappropriation of development funds.

June is a typically lean period in the North in terms of food security, and UNICEF sees increasing numbers of malnourished children in nurseries and hospitals, according to the official.

North Korea’s harvest this year is expected to fall 1.17 million tons short of food needed to feed its 24 million people, according to the Seoul government. Even if the North’s own imports and Chinese aid are counted in, the net shortage will likely surpass 500,000 tons, it said.

Balagopal said his agency has secured about half of its US$13 million target budget for operations in North Korea this year.

He noted there are “some indications” that access to the provinces in the northeast may be restricted to the U.N. agencies. He did not elaborate and said the U.N. will stop its assistance if the access is not guaranteed.

Read the full article here:
UNICEF aid flowing steady in N. Korea: Pyongyang chief
Yonhap
6/3/2009

Posted in Agriculture, Agriculture statistics, Food, International Aid, Statistics, UN, UN World Food Program, UNDP, UNICEF | Comments Closed

DPRK preparing for spring fertilizer shortages

Wednesday, March 18th, 2009

Institute for Far Eastern Studies (IFES)
NK Brief No. 09-3-17-1
2009-03-17

North Korea, facing chronic food deficiencies, is again looking at fertilizer shortages as the spring farming season approaches. North Korean authorities and farmers are particularly troubled by the fact that, just as last year, the likelihood of receiving chemical fertilizer aid from the South is practically non-existent.

A February 26th (North) Korean Central News Agency (KCNA) article titled “Korea’s Effort to Overcome the Food Problem” reported strenuous efforts were underway to “independently” overcome the lack fertilizer in order to ease food shortages throughout the nation. According to the KCNA, “While giving on-the-spot guidance at the Heungnam Fertilizer Complex, Comrade Kim Jong Il explained that in order to ease the food problems, much fertilizer needs to be sent to farming villages.” In addition, it was explained that organic fertilizer production needs to be stepped up in order to compensate for the lack of chemical fertilizer. The report added, “The People’s Army as well as enterprises, institutions, villages, and civic organizations across the country are sending farming utensils and compost to agricultural villages.”

According to Tae-Jin Kwon, leading researcher at the Korea Rural Economic Institute, North Korea drastically increased chemical fertilizer imports from China in order to prepare for the possibility of a continued hold on South Korean fertilizer aid, purchasing approximately 40 times more fertilizer at the end of last year and this January than it imported during the same period a year earlier. According to Chinese customs statistics, North Korea imported 25,608 tons of fertilizer between November 2008 and the end of January 2009. During the same period a year prior, North Korea imported a mere 635 tons. Kwon stated that the reason for this sharp increase in chemical fertilizer imports was a measure to stockpile necessary amounts of resources in preparation for the eventuality that South Korean fertilizer aid would not be forthcoming.

During this same period, North Korea imported 12,694 tons of Chinese grains, a notable drop from the 108,109 tons imported one year ago. Kwon argued that this was a reflection of North Korea’s advance import and stockpiling of grain in light of last year’s Chinese measures restricting the export of grain, and the fact that this spring, fertilizer is a more pressing need.

“If South Korean fertilizer aid to the North is not forthcoming this year, it will have a severe impact on the North’s grain production. This is already reflected in grain prices within North Korean markets, and could serve to drive them up even further.”

Over the last 10 years, more than 65 percent of the fertilizer used in North Korea has been provided by the South, with Seoul providing between 300 and 350 thousand tons each year. This is enough to boost North Korean grain production by 600 thousand tons annually. Kwon pointed out, “North Korea owes its increasing grain production since 2000 to South Korean fertilizer aid.”

He went on to add, “Even if the missile situation were resolved and an atmosphere conducive to dialog could be created within 6-Party Talks, the South Korean government would not be able to open dialog with North Korea until after April,” and, “If dialog were reestablished and aid transport were arranged, in order for fertilizer to be effective it would have to be sent to North Korea by May, at the latest.”

Posted in Agriculture, Agriculture statistics, Food, South Korea, Statistics, Trade Statistics | Comments Closed

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