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How should we understand North Korean market crackdowns?Thursday, November 8th, 2018
By Benjamin Katzeff Silberstein
Daily NK reports (in Korean) that a “inspection unit against anti-socialist activities”, is active on Hyesan markets, inspecting goods and confiscating ones deemed either illegally smuggled in from China, or harmful for people’s health, such as narcotics. Such “units” (“그루빠”) are fairly common in North Korea, and typically consist of officials from various public security agencies cooperating to get at a specific, problematic tendency in certain areas or spheres of society.
We’ve seen quite a lot of news over the past few months, and even years, of market crackdowns under Kim Jong-un. On the one hand, this is simply the North Korean state apparatus being itself, and cracking down on “deviant” behavior such as smuggling, and trading of a range of, likely often arbitrarily, forbidden goods, and not least foreign media and information. Unsurprisingly, the agents conducting these searches tend to often quietly disappear if given the right amount of cash or cigarettes:
소식통은 “이 단속 그루빠는 장사꾼들에게 여러 트집을 잡지만 결국 돈이나 담배를 받으면 몇 마디하고 슬그머니 물러난다”면서 “갑자기 그루빠들이 열을 올려서 주민들은 ‘무슨 꿍꿍이가 있느냐, 돈벌이를 하려는 것이냐’며 불평을 한다”고 전했다.
On the other hand, however, one could see this as a process of the state making the market more regularized and based on rules. Kim Jong-un seems to appreciate the stability and wealth brought by the markets, and has worked to integrate them further into the regular economic system. Clamping down on smuggling and trade deemed unsuitable from the state’s perspective, in a way, is part of this process. Clampdowns like this, in a way, seem to go in parallel with increasing regularization of market trade, through the permit regime, designated market buildings, and the like. The North Korean government’s acceptance and institutionalization of the markets has never been driven by an ideological commitment to free-market liberalism, but rather, by the opposite: aspirations for stability, and greater economic control.
Posted in Agriculture, Civil society, Economic reform, Political economy | 0 Comments
Humanitarian aid, luxury goods and aid diversion in North KoreaMonday, October 29th, 2018
By Benjamin Katzeff Silberstein
North Korea imported luxury goods from China for at least $640 million, says one South Korean lawmaker. Reuters:
“Kim has bought lavish items from China and other places like a seaplane for not only his own family, and also expensive musical instruments, high-quality TVs, sedans, liquor, watches and fur as gifts for the elites who prop up his regime,” opposition lawmaker Yoon Sang-hyun said in a statement.
“With the growing loophole, Kim would be able to near his goal of neutralizing sanctions soon without giving up the nuclear weapons.”
Last year, North Korea spent at least $640 million on luxury goods from China, according to Yoon.
China does not provide breakdowns of its customs figures. Yoon compiled data based on a list of banned items crafted by Seoul in line with a 2009 U.N. resolution.
Beijing’s customs agency did not immediately respond to a request for comment. Beijing has said it strictly abides by international sanctions against North Korea.
The 2017 luxury trade volume was down from the 2014 peak of $800 million, but was only a 3.8 percent drop from $666.4 million in 2016, according to Yoon.
The luxury items accounted for 17.8 percent of North Korea’s entire imports from China last year which totaled $3.7 billion, Yoon said.
Purchases of electronic products such as high-end TVs made up for more than half of the total transactions, worth $340 million, followed by cars with $204 million and liquors with $35 million.
China’s trade with North Korea from January to August this year tumbled 57.8 percent from the year-earlier figure to $1.51 billion, China’s customs agency said last month.
But Yoon’s analysis also shows North Korea funneled more than $4 billion into luxury shopping in China since Kim took power at the end of 2011.
Yoon accused China of loosening enforcement of sanctions, and criticized South Korea’s recent request for U.N. and U.S. exemptions to restart inter-Korean economic cooperation.
Full article:
North Korea bought at least $640 million in luxury goods from China in 2017, South Korea lawmaker says
Hyonhee Shin
Reuters
2018-10-22
Now, none of this means that Kim Jong-un is personally swimming in a sea of handbags and TV-sets in Pyongyang. Rather, it means that North Korea – whether semi-private companies or state entities – has imported a fair amount of so-called luxury goods, despite sanctions that should prevent such imports. The term “luxury goods”, moreover, is too broad in this case and encompasses several items that wouldn’t necessarily be classified as “luxurious” by most.
At the same time, UN institutions estimate that 1/4 of children in rural North Korea are underweight. As Chosun Ilbo reports:
The wealth gap between country and city is widening. One in every four rural children is undernourished and underweight and the North has the most serious poverty issue in East Asia, the FAO said.
The wealth gap between country and city is widening. One in every four rural children is undernourished and underweight and the North has the most serious poverty issue in East Asia, the FAO said.
The proportion of underweight children in rural areas is 27 percent but only 13 percent in the cities.
Full article:
1/4 of Rural Kids in N.Korea Underweight
Kim Myong-song
Chosun Ilbo
2018-10-18
The World Food Program (WFP), meanwhile, has only received 27 percent of their funding appeal for 2018:
According to Herve Verhoosel, a spokesperson for the World Food Programme (WFP), the UN agency is staring at a massive 73 per cent shortfall in funding for 2018, hurting critical programmes such as nutritional support for children.
“We must not wait for diplomatic progress to alleviate the suffering of millions of people – funds are urgently needed now,” said Mr. Verhoosel.
“Any donation we receive today will take at least six months to reach the people who need it, due to the time it takes to purchase and transport food.”
A lack of funding risks reversing small gains in nutrition for mothers and children, made over the past four years, on the back of concerted efforts by humanitarians. Limited funding has also resulted in the suspension of operations to build resilience among disaster-hit and vulnerable communities.
WFP needs $15.2 million over the next five months to avoid further cuts to programmes which help feed around 650,000 women and children each month.
Across the country, which is officially known as the Democratic People’s Republic of Korea (DPRK), more than 10 million people – almost 40 per cent of the population – are undernourished and in need of support, with one in five children stunted due to chronic malnutrition.
The country is also vulnerable to natural disasters, such as drought and flooding, which affect agricultural production and livelihoods.
Article source:
Critical food programmes in North Korea can’t wait for ‘diplomatic progress’, UN food agency warns
UN News
2018-10-09
So, what is really going on here? Is it accurate to say, like the headlines imply, that North Korea’s leadership is simply buying a bunch of luxury items for millions of dollars and letting children starve in the countryside? Is there a real risk that humanitarian aid can be diverted to the army, and what does this really mean? These are separate questions, but they are interrelated in the sense that they all touch upon Pyongyang’s incentives and policy choices when it comes to its humanitarian situation.
On 38 North, the host website of this blog, Kee Park and Eliana Kim showconvincingly that the fear of diversion of aid to the military is exaggerated and unfounded:
International donors and organizations have become increasingly reluctant to provide funds to North Korea. Although five countries—Switzerland, Sweden, Canada, France and Russia—have responded to the UN’s request this year, there is still a funding gap of $88.1 million. Previous donors such as United Kingdom, Australia, Japan, Ireland, South Korea and others remain uncommitted. One concern frequently cited for this reluctance is that foreign aid, including critical humanitarian aid, will either be diverted to the military or fund the nuclear weapons and missile programs or take pressure off of the regime to provide for its people.
However, these concerns are based on basic misunderstandings of how and why humanitarian assistance is provided to North Korea. Facts on the ground show that the potential for diversion is minimal and the main benefactors are generally not government or military institutions. Given the mission of UN humanitarian assistance, denying the DPRK this assistance for political purposes is both unethical and inhumane.
Full article:
The Case for Funding the UN’s Request for Humanitarian Assistance to the DPRK
Kee B. Park and Eliana E. Kim
38 North
2018-10-23
One of their most central arguments is that opportunities for diversion are too small to be meaningful. Overhead costs only make up a small percentage of total costs, and little of it could even hypothetically be diverted given that it’s all needed to run UN operations in the country. When it comes to diversion of actual food aid, the authors argue that most diversion that may occur is done towards the markets – that is, the state doesn’t actually take foodstuffs for its own use, and resources that are used elsewhere do not necessarily benefit the North Korean government.
It also seems like diversion was much more of a real concern in the 1990s and early 2000s. The worry was primarily about diversion of food aid to the military and away from society’s most needy, and it wasn’t unfounded at all. But we have to assume that there’s been a great deal of learning done by NGOs and international institutions present on the ground. They know what they’re doing.
Today, food aid volumes aren’t large enough to be meaningful for the army to try to divert, it seems, even if they would want to. Much of the aid, moreover, consists not of rice and other goods consumed by the general public, but likely of nutritional assistance designed to maximize the caloric intake of vulnerable groups such as children and breastfeeding mothers. We also have to remember that the chain of aid distribution and reception is long and diverse. Park and Kim argue that Pyongyang has invested much more in recent years to meet humanitarian needs. I would add that people who have worked with humanitarian aid delivery on the ground have often commented on how local officials and staff members, regardless of what one might think of Pyongyang’s intentions, are often passionate and genuine in their will and hard work to ensure that food aid reaches their local constituents and intended recipients.
However, this angle misses an important point. Diversion isn’t just about the army grabbing bags of rice intended for malnourished children, it’s also, arguably, about resources in the bigger picture. At the end of the day, for the North Korean regime, feeding the most vulnerable is a matter of priority. We know it could, should it choose to do so. Even in years when North Korean harvests have likely been lower than this year (which we don’t yet have figures for) given the upward trend in harvests over the past few years, the deficit left between domestic production and projected need wouldn’t have been that expensive to make up for.
Enter the luxury goods. We don’t know what proportion of the $640 million represent purchases strictly made by the state, and not by individual North Koreans or private enterprises. (The lines in this realm are rarely clear-cut.) But even low-balling it and assuming that only 1/6 is bought by the government to supply Kim Jong-un’s court and patronage networks, that’s still more than what would have been required in food imports to meet the estimated needs of the population in 2012, when, again, production was probably even lower than it is today. The UN appeal of $111 million of this year is also roughly equivalent to 1/6 of North Korea’s estimated “luxury” goods import of the past year.
And that’s just using luxury goods as an illustrative example. We could also look at any one of the massive infrastructure investments by Kim Jong-un and the renovations and new constructions of entire city blocks and streets in Pyongyang, or loft projects such as the Masikryong Ski Resort. The point is that North Korea surely has the funds to cover the humanitarian needs of the most vulnerable among its population, but chooses not to and instead counts on the UN to foot the bill for doing so. A form of “diversion”, if you will.
This is not to argue either for or against giving humanitarian aid. That the regime makes certain policy choices seems a morally problematic argument for not funding humanitarian needs. But in the long run, especially as North Korea’s economic health improves, one has to wonder whether it’s sensible for the international community to keep paying for humanitarian needs in a country whose regime could afford to do so, but makes a different policy choice, year after year.
Posted in Agriculture, International Aid, UN, UN Food and Agriculture Organization, UN World Food Program, Uncategorized | Comments Off on Humanitarian aid, luxury goods and aid diversion in North Korea
Where do North Korea’s agricultural policy changes stand?Tuesday, October 9th, 2018
By Benjamin Katzeff Silberstein
Over at NK News, Peter Ward recently published a highly interesting piece on Kim Jong-un’s official endorsement of agricultural policy changes. As Ward notes, one has to read beyond the carpet of propaganda-esque language to really see the subtle but significant changes in how official sources, at the highest level, talk about agricultural management:
Under the system that Kim Jong Un introduced in 2014, the sub-work team leader remains the line manager in charge of day-to-day operations. However, their team now usually consists of 15-20 people, though can sometimes be smaller where the land is better and farm more mechanized.
Kim emphasizes the sub-work team leader’s core role as a conduit for Party agricultural policy and the so-called “Juche Agricultural method.” The sub-work team leader must extol such methods and ensure that production tasks given to them by the party are carried out.
In Kim’s vision, the sub-work team leader is akin to an entrepreneur in charge of their staff: tasked with overcoming issues and implementing party directives in a creative and dynamic fashion in line with circumstances. The sub-work team manager is supposed to lead from the front – “up first in the morning and to bed latest at night.”
Much of this could arguably have been said about production leaders under old institutional arrangements in North Korea as well. Ward, however, points out a significant change:
One point that Kim makes that is revolutionary however, is that the state will take “a certain portion of grain [produced],” leaving “the rest to farmers whose distribution will be decided by the number of days they have worked – the amount they have earned.” This is the essence of the new system: farmers keep anything they harvest beyond their mandatory state quota (planning indicator), the state no longer just takes everything before providing a fixed ration.
Full article here:
Masters of the farm: North Korea’s new agricultural entrepreneurs
Peter Ward
NK News
2018-10-09
One crucial question that seems to remain, however, is around how the state sets its quotas. As Ward points out, farmers get to know ahead of time how much of their output they will get to keep, based on estimated harvests. In a recent dispatch, Daily NK said that no matter the actual production, the state takes its pre-set share in absolute terms even when actual production ends up being lower than anticipated. In other words, there’s still much room for predatory economic governance by the state, especially since the new system may still lack clear and transparent central guidelines by the state. In any case, the new system, judging by all available information, is a step towards greater efficiency.
Posted in Agriculture, Economic reform | Comments Off on Where do North Korea’s agricultural policy changes stand?
Grain yields appear to be down in North Korea this seasonThursday, October 4th, 2018
Benjamin Katzeff Silberstein
At least judging from the trend at one farm:
September’s grain yield projection for the Ripsok Cooperative Farm in Mundok Country, South Pyongan Province, has been set at 60% of the estimate made earlier in the year.
North Korea habitually sets high grain production targets but in reality, the government actually expects to achieve 60%-70% of the projection. For example, last year the Ripsok Cooperative Farm set their grain production goal at 6000 tons, but achieved an actual yield of 3800 tons.
This year’s harvest is expected to reach only 3600 tons, representing an approximate 5% decline from last year.
Analysts have predicted a reduced grain harvest this year due to damage from the drought and typhoon that hit North Korea’s grain producing regions including South Pyongan and North and South Hwanghae provinces. However, this report marks the first internal acknowledgement of the country’s reduced grain yield.
“In the middle of September, cadres from the Rural Management Committee came out to check the crop yield and estimated that it will be less than last year’s,” a source in South Pyongan Province told Daily NK.
At the end of August and early September each year in South Pyongan Province, the Party’s district agriculture department cadres, collective farm advisers, and people’s committee agriculture managers tour the farms and determine expected grain yields. These estimates are conducted nationwide and the information is sent to the central government.
Ripsok Cooperative Farm is considered a highly productive farm with an annual planned grain production of 6000 tons, at a 7:3 ratio of rice to corn and other grains. Its continued operation involves approximately 5000 people, including farmers and household members.
However, when the Mundok County Party Committee members, Rural Management Committee and other cadres heard that the year’s harvest will be lower than last year’s, they were openly disappointed. Officials believe that natural disasters were a major cause, the source said.
Even if the production fails to reach its projected yield, the North Korean government buys back 30% of the grain based on its original planned output. Although the national price is 240 won per kilo, the market price is 5000 won per kilo, which means that the government basically buys the grain for free.
After the government buyback, seeds, grains and debts are repaid, and the remaining profit is distributed to the farmers.
“After considering the buyback from the government, as well as the storage of seeds and grain and debt repayment, the farmers who have worked so hard throughout the hot summer to prevent crop damage will receive a lot less than they did last year,” a separate source in South Pyongan Province reported.
This piece of information about how buyback figures are estimated is interesting. Though farming administration has become much more liberal (if you will), it doesn’t mean that the government has rolled back its heavy hand entirely in economic management. With reforms such as the household-responsibility system, the central basis for the government is increased efficiency, not necessary benevolence.
Full article:
Grain yield projection takes 5% hit at farm in South Pyongan Province
Jo Hyon
Daily NK
2018-10-05
Posted in Agriculture | Comments Off on Grain yields appear to be down in North Korea this season
As farmers get to keep more of production, productivity increases, say sources in North KoreaThursday, October 4th, 2018
Benjamin Katzeff Silberstein
This Daily NK article isn’t yet available in English, but here’s the gist of it: right now harvest season is in swing and North Korea, and with the (seemingly) continuously expanding household responsibility system (포전담당제), labor productivity is increasing, according to some sources, because farmers are able to keep 70 percent of their own production. We still don’t know precisely how widespread the system is, but given its very public recognition in North Korean media such as Rodong Sinmun and some journals, it would be reasonable to assume that local administrators have a green light to go ahead with it if they wish, if it isn’t already fully implemented throughout the country. Daily NK:
북한 일부 지역에서 ‘포전담당제’ 도입에 따라 농민들의 근로의욕이 높아지고 있는 것으로 전해졌다. 특히 최근에는 모피나 가죽 등 군부대 지원 목적의 세외부담도 줄어들면서 농사일에 더욱 열성적으로 뛰어들려는 모습이 나타나고 있다는 전언이다.
평안남도 소식통은 4일 데일리NK와의 통화에서 “이제는 개인 포전제가 실시돼 그만큼 농사에 자기 땀을 바친다”며 “식량 걷이를 하면 열 중에 셋(30%)만 국가에 바치고 나머지 일곱(70%)은 자기가 처분하는 식이라 농사하는 사람들 생활이 폈다”고 전했다.
소식통은 “포전제를 실시한다는 말은 몇 년 전부터 나왔는데 실제로 실시된 것은 작년부터”라며 “비료는 돈이 들어가지만 퇴비는 움직이면 얼마든지 모을 수 있으니 오히려 이제는 노동자보다 농사꾼들이 더 부지런해졌다”고 말했다.
실제로 최근 들어 농사일에 나서는 주민들이 인분이나 짐승의 배설물 등 퇴비를 모으러 여기저기로 부지런히 움직이고 있다는 게 소식통의 이야기다.
포전담당제는 지난 2012년 김정은 북한 국무위원장의 ‘새로운 경제관리체계를 확립할 데 대하여’라는 담화 발표를 계기로 본격 도입됐다. 기존의 분조(分組)를 가족 단위로 쪼개 소규모 인원이 포전(圃田, 일정한 면적의 경작용 논밭)을 운영토록 해 생산량의 일정 비율만 국가에 바치고 나머지는 개인이 처분할 수 있도록 일부 자율성을 부여한 제도다.
현재 이 같은 제도는 북한 전역으로 확대되는 추세지만 전면 실시 및 정착 여부에 대해서는 여전히 회의적인 시선도 존재한다. 특히 북한 당국은 포전담당제의 성과가 뚜렷하게 입증되고 있다고 선전한 바 있으나, 현재로서는 해당 제도가 북한의 농업생산량 확대에 기여하고 있다는 뚜렷한 근거를 찾아보기 어렵다.
Full article:
“北 일부지역 농민들, ‘포전담당제’ 실시에 근로의욕 상승” (Farmers in some areas say that labor productivity has increased, thanks to the household-responsibility system)
Ha Yoon-ah
Daily NK
2018-10-04
Posted in Agriculture, Economic reform | Comments Off on As farmers get to keep more of production, productivity increases, say sources in North Korea
Red Cross warns of heatwave threatening North Korea’s food productionFriday, August 10th, 2018
Benjamin Katzeff Silberstein
Full press release:
Beijing/Geneva, 10 August 2018 – A heatwave in the Democratic People’s Republic of Korea (DPRK) will have serious health consequences for children and elderly people unless urgent action is taken.
There has been no rainfall in DPRK since early July and temperatures are averaging 39 degrees C (102.2 degrees F) across the country. The next rain is expected in mid-August. Any threat to food security will have a serious effect on an already vulnerable and stressed population – a similar dry spell in 2017 caused a 7.2 per cent drop in food production at a vital point of the harvest cycle.
Joseph Muyambo, Programme Manager for the International Federation of Red Cross and Red Crescent Societies (IFRC) in Pyongyang, said: “This is not yet classified as a drought, but rice, maize and other crops are already withering in the fields, with potentially catastrophic effects for the people of DPRK.
“We cannot and must not let this situation become a full-blown food security crisis. We know that previous serious dry spells have disrupted the food supply to a point where it has caused serious health problems and malnutrition across the country.
“It’s children aged under 5 who will suffer the most. High levels of malnutrition can cause impaired physical and cognitive growth, and this is completely unacceptable. The lives of elderly people and those already suffering from illnesses are also at risk during this heatwave.”
Today, IFRC released 213,474 Swiss francs from its Disaster Relief Emergency Fund to help the DPRK Red Cross to support more than 13,700 of the most vulnerable people at risk from the heatwave.
The Red Cross has deployed emergency response teams and 20 water pumps to irrigate fields in the hardest-hit areas, while staff and volunteers are helping to raise awareness of the signs, symptoms and treatment of heat-related illnesses.
Even before the current crisis, more than 10 million people – 40 per cent of DPRK’s population – needed humanitarian assistance. This worrying situation has been exacerbated by the impact of international sanctions on DPRK, which have made it difficult for aid and supplies to get into the country and to reach people who desperately need support.
The press statement can be found here, on the IFRC website.
International bodies have previously warned of looming food shortages and poor harvests in North Korea, only to later see crop yields come out larger than expected. Let’s hope that’s the case this time as well. It’s also worth remembering that it’s not bad weather per se that threatens North Korean food production, but poor institutions and bad agricultural policies that lay at the core of the problem.
Posted in Agriculture, International Aid, Political economy, Statistics |Comments Off on Red Cross warns of heatwave threatening North Korea’s food production
North Korean officials disheartened over this year’s harvestWednesday, August 8th, 2018
Benjamin Katzeff Silberstein
Daily NK:
As North Korea continues to reel from an unprecedented heat wave, the authorities are conducting a nationwide assessment of the damage that has been inflicted on crops as well as on-site farm visits, report sources in the country.
“The temperature has risen daily and there’s no rain, so crops all over the country are drying out,” said a North Hamgyong Province-based source on August 6. “The authorities are investigating the damage done to the agricultural fields.”
The source said that the authorities have sent investigative teams to farms throughout the country who are taking photos of the damage and sending them back to central headquarters.
The roots of the corn crops have yellowed because they have dried out from the lack of rain. North Koreans consider the agricultural season to be “finished” this year. Farmers have suffered from both the double impact of intense heat and drought.
In Musan County, where mining activities have stopped, many miners have sought to obtain land after facing significant difficulties. The intense drought has created concerns about how they will feed their families.
“There are many people saying that the ‘weather is killing us’ while beating their fists against their chest in front of their dying crops,” said a source in Ryanggang Province.
“The authorities likely wanted to show people that they are keeping an eye on things and making an effort to improve the situation.”
Officials who are part of the investigation teams, however, are reportedly saying that there is no hope in recovering from this year’s agriculture troubles.
“Officials have dwindling hope about this year’s harvest, and some even say the only thing to do is wait for the intense heat to end,” the Ryanggang-based source added.
Meanwhile, the state-run publication Rodong Sinmun has reported, “Farmers are taking it upon themselves to conduct a powerful campaign to prevent damage [to the crops] from high temperatures and drought.” The state authorities are emphasizing “self-sufficiency” as a tool to combat damage to crops, which also hints that the authorities have little in the way of clear cut measures to deal with the situation.
Article source:
Disheartened North Korean officials label this year’s harvest ‘dead in the water’
Kim Yoo-jin
Daily NK
2018-08-08
Posted in Agriculture, Food, General markets (FMR: Farmers Market) |Comments Off on North Korean officials disheartened over this year’s harvest
South Korean officials in North Korea for joint forest inspectionWednesday, August 8th, 2018
Benjamin Katzeff Silberstein
Yonhap reports:
A group of South Korean officials left for North Korea on Wednesday to conduct a joint inspection of forests and protect trees from harmful insects and diseases, the unification ministry said.
The officials led by a senior forest agency policymaker crossed into Mount Kumgang on the North’s east coast, where they will jointly examine the forests there, according to the ministry.
They will return home later in the afternoon.
The one-day trip follows up on the agreement reached during working-level inter-Korean talks early last month for forestry cooperation.
They agreed to cooperate in protecting forests along the inter-Korean border and in other areas from damage caused by harmful insects and diseases.
The two Koreas conducted a similar on-site inspection in July 2015 near Mount Kumgang. Two months later, they carried out efforts to fight insects and other damage, which was said to have cost them over 100 million won (US$89,400).
Meanwhile, the North will send six transport officials to the South on Thursday to hold a meeting and discuss details related to their cooperation in modernizing and possibly connecting railways over their border, the ministry said.
The meeting, the second of its kind, will be held at the Customs, Immigration and Quarantine (CIQ) office in Paju, just south of the inter-Korean border.
It came after their first meeting in Kaesong last month to discuss the outcome of an inspection of the conditions of the 15.3 kilometer-long railways from the North’s border town to the Military Demarcation Line (MDL) that separates the two Koreas.
Article source:
S. Korean officials visit N. Korea for joint inspection of forests
Yonhap News
2018-08-08
Posted in Agriculture, Forestry, International Aid, Ministry of Forestry, South Korea | Comments Off on South Korean officials in North Korea for joint forest inspection
The economics of coal trade, sanctions, and rice prices in North KoreaMonday, August 6th, 2018
By Benjamin Katzeff Silberstein
This may just be one piece of anecdotal evidence, but it’s interesting to note that sanctions haven’t necessarily leading to coal exports stopping – as we know from the multitude of evidence that North Korean coal ships have still been making their transport rounds – but primarily to drastically slashed prices, and surely to significantly smaller volumes being shipped as well. This reinforces the point that even if trade continues, sanctions put a large premium on trading with North Korea. Importers of North Korean coals, simply put, have to get charged less because of the risk they’re taking, and those exporting North Korea need to be paid more for the endeavor to be worth it.
(UPDATE on August 12th): I realized I may have misread the article – the source that Daily NK spoke with appears to be referring to domestic prices for coal, not export prices. Still, since we know that coal is in fact being exported through various evasion methods (albeit in fairly small quantities, perhaps), the point stands.
The article also makes an interesting point about the market prices for rice. It is remarkable how little prices have changed through the past year, when sanctions have been in place and enforced by China to a much greater extent than before. Still, according to this piece, prices aren’t dropping even though people’s incomes in fact are going down significantly, at least in parts of the country. So it may be that prices were already at or close to the “reservation price” for suppliers, i.e., the lowest point at which they’re willing to sell at all. Hard to confirm or check, but it is a plausible partial explanation for the strange dynamics of market prices in North Korea over the past year.
Daily NK:
As coal exports have slowed to a crawl due to international sanctions, North Korea’s coal country of Kaechon, South Pyongan Province, and Kujang County, North Pyongan Province, have been suffering under intense economic difficulties. Most residents in these areas were dependent on the export of coal and are directly feeling the effects of the trade stagnation.
“When coal was being exported, it went for up to 130,000 won (16 US dollars) a ton, but now due to the sanctions the price has fallen to 50,000 won (around 6 US dollars) a ton […] The coal must be sold for workers to get paid. The halt in exports has even led to someone starving to death,” said Kim Woo Chul (alias, male resident of Kujang County), who was traveling in China on August 1.
“In April or May this year a fifty-year-old man died of starvation,” he said, nothing that while corn is provided by the government in July and August, “it lasts for less than two months.”
Kim also said that rice is being sold in the market but most people in the region can’t afford it. “Food is not scarce in the Kim Jong Un era, but people have no money so they can’t buy it,” he emphasized. Kim also noted that there were many empty food stands at the markets because demand has fallen due to the lack of money.
Another resident from Kaechon, South Pyongan Province, named Ri Sung Rim (alias) added, “There is a lot of rice at the markets, and people would buy it if they had money, but they don’t have money because coal is not being sold anymore […] People who ran private businesses selling coal are having a particularly bad time and are starving because they can’t even make corn porridge.”
She explained that a small amount of corn is given to those actually producing coal by the state, but teams that are not producing anything receive no food rations. “They have nothing to eat so there are even people who are taking their children and leaving the region,” she said.
The two interviewees also talked about the chronic electricity shortages in North Korea. While Pyongyang and other major cities are supplied with a relatively steady supply, the rural areas receive very little. People cannot watch television because of the lack of electricity, which means that many in these areas only recently found out that Kim Jong Un had met with the leaders of South Korea and the US.
“Electricity is only supplied for an hour or less in Pyongsong, while those who are wealthy siphon off electricity from factories or use car batteries,” said Kim. “Some of the wealthier people use car batteries to watch KCNA on television sets, but most cannot afford that.”
“Production teams get electricity, but residents don’t get electricity in their homes […] Car batteries need to be recharged to supply electricity at home, but there are no places to recharge them. People get them recharged if they know someone at the factories, but they are out of luck otherwise,” Ri said.
“I only found out about Chairman Kim Jong Un visiting China when I visited the country […] People need electricity to see the news and, since they can’t, they don’t know what’s going on.”
Article source:
Export sanctions lead to hard times for those in coal-producing regions
Ha Yoon-ah
Daily NK
2018-08-06
Posted in Agriculture, China, International trade, Political economy, Statistics | Comments Off on The economics of coal trade, sanctions, and rice prices in North Korea
Lack of fertilizers behind North Korea’s subdued harvestSaturday, August 4th, 2018
Benjamin Katzeff Silberstein
History repeats itself, it seems, and shows how fragile North Korea’s more or less autarkic agriculture still is. Much has changed in the way agriculture is managed in the country, to be sure, but the bottleneck of lack of fuel translating into lack of fertilizer, remains. That’s one of the main reasons this harvest is expected to lag behind that of last year. It remains to be seen what actually happens, as actual harvests don’t always correspond with expectations. In any case, things don’t look great. Korea Times:
“With the record heat, food production in North Korea is expected to be reduced by 5-10 percent this year, said Nam Sung-wook, professor at Korea University’s Department of Korean Unification, Diplomacy and Security.
“In particular, a fall in July precipitation will have a negative impact on rice farming,” said Nam, whose study focuses on North Korean agriculture and economy.
However, he said that there was a more fundamental reason ― a lack of fertilizer, agricultural machinery and agricultural chemicals.
“North Korea’s repeated failure year after year to achieve its crop production goal shows that the country does not have the economic conditions to maximize productions,” Nam said. “For example, North Korea cannot produce chemical fertilizers because they are made out of refined crude oil. North Korea’s crude oil imports have been under sanctions since last year.”
He said North Korea’s media often promoted the development of compound fertilizers to increase agricultural production, but those compounds were organic, and there was a limit. Another problem was the way the socialist cooperative farms operated, with no incentives for workers.
“The development of the general economy and the introduction of private farms to give incentives are necessary to increase food production,” he said. “The Rodong Sinmun reports can also be seen as a signal to both South Korea and the U.S., to offer food aid, while also calling on residents to be patient.”
The workers’ party mouthpiece carried front page reports on Thursday and Friday for two consecutive days about the country’s struggle with drought.
Rodong Sinmun also emphasized that solving the food problem was a “pressing task,” as was securing an adequate supply of water.
Article source:
Lack of fertilizers adds to North Korea agriculture crisis
Jung Da-min
Korea Times
2018-08-04
Posted in Agriculture | Comments Off on Lack of fertilizers behind North Korea’s subdued harvest
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