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The All-North Korean Pig Farming Sector

Saturday, July 10th, 2010

Accroding to the Daily NK:

The 8th issue of Rimjingang, the periodical written by North Korean underground journalists, sheds light on North Korea’s private livestock industry.

One article, “Livestock Industry Developing from Private Means of Living into Private Enterprise,” describes how pig farming has developed during and since the famine period. It explains how, under the functioning planned economy, the “livestock industry” amounted to each household unit raising pigs to sell on the side, but now the planned economy is little more than a distant memory and the livestock sector has been specialized and systematized into sectors; breeding, butchery, distribution and sale.

That is why in North Korean markets 90% of goods are Chinese, but 100% of pigs and pork is North Korean.

Under the planned economy, roughly 20% of people in rural areas privately raised pigs and sold them to state meat procurement stores for two kilograms of corn per kilo of meat, the report notes. But from the mid 1980s, procurement stores bought them for cash, so competition grew and eventually the stores had to close due to increasing prices and their own lack of ready cash. Since the 1990s, distribution has stopped and more than 50% of people have started raising pigs in more specialized ways, it adds.

The report goes on to explain that during the March of Tribulation people figured out that their salaries, even when received, represented a mere tiny fraction of the labor value they could realize by trading illegally in the jangmadang. Many were unwilling to put up with it.

“Going through the March of Tribulation, the profit motive through the market has opened the door to new food lives which the Leader cannot open with his slogan, ‘reform food lives with meat,’” the report asserts. “Now, since a powerful supply and demand system has been spontaneously established, anybody can afford to eat meat as long as they can earn money.”

“’Leave us alone!’ is the real voice of the people of Chosun,” the report concludes, adding that the phenomenon of the Chosun pig farming industry implies the clear potential to develop modern industry in North Korea.

The 8th edition of Rimjingang was published in Korean on June 30th.

Read the full story here:
The All-North Korean Pig Farming Sector
Daily NK
Yoo Gwan Hee
7/10/2010

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Posted in Agriculture, Arduous March, Black markets, Food, General markets (FMR: Farmers Market), Rimjingang | Comments Closed

Market prices stable

Thursday, July 8th, 2010

According to the Daily NK:

Food price in North Korea at the end of spring held steady against food prices in March, and worries about an impending famine proved unfounded.

The Daily NK has looked at market food prices in Pyongyang, Shinuiju, and Chongjin over the first week of July. Everywhere, rice cost about 500 won while corn cost about 400 won. Compared to food prices in March, during the period when food is traditionally in the shortest supply, rice prices were much the same, whereas corn prices had risen by 50 percent.

A source inside North Korea explained, “Since the redenomination, some people have dropped from ‘middle income’ to ‘poor.’ As a result, demand for corn has increased, and that is the reason why corn prices have gone up. Some people still eat rice; however, many of those who used to eat rice are now feeding their families on corn.”

“Because of the planting battle, market hours were made shorter, but the market is running smoothly and food prices are stabilizing.”

However, the source conceded that the food security of senior citizens with no family support and homeless children seems to be very bad. The source said some of these people are indeed dying of malnutrition and disease, though not outright starvation.

So, while the food supply situation in North Korea is not in unusually poor shape, it seems that the aftereffects of last year’s redenomination are still taking effect,

Corn prices have increased by almost 100 won on average in the last month, and flour prices have also increased by about 200 won.

However, the price of fuels such as gasoline and diesel either remained the same or decreased slightly. Gasoline remains at 900 won, which is a hundred won less than it was in May. Diesel remains at 400 won, which is 200 hundred won less than it was.

Since last year, North Korea has been pursuing various construction projects as part of its goal of building a strong and prosperous state by 2012. It is possible that fuel heading for construction sites is finding its way into the markets.

Here is the data in JPG format!

2010-7-7-dnk-food-data.jpg

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Market Prices Holding Firm
Daily NK
http://www.dailynk.com/english/read.php?cataId=nk01500&num=6568
Yang Jung A
7/7/2010
 

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Posted in Fiscal & monetary policy, Food, General markets (FMR: Farmers Market), Price liberalization | Comments Closed

Daily NK sources reject starvation reports

Tuesday, July 6th, 2010

According to the Daily NK:

A report by aid organization Good Friends stating that widespread starvation is happening again in North Korea has been vehemently denied by inside sources.

In the June report, Good Friends, citing its own sources, asserted that the Chosun Workers’ Party had dispatched an investigation team to each area of the country following the June 7th Supreme People’s Assembly meeting, and that the teams had found up to two hundred people dead in each district of South Hamkyong Province.

According to Good Friends, “The first report from South Hamkyong reached the central party on June 18th, saying that for the four months from March to June in Hamheung, Heungnam and Sinpo, 100 or so people had died of starvation.”

However, a Daily NK source from Hoiryeong who recently visited Chongjin in North Hamkyong Province was incredulous when informed of the report, saying, “Who told you that? I have heard nothing about so many people dying of starvation in either Hoiryeong or Chongjin.”

Another source from Yangkang Province who said he visits Heochon County in South Hamkyong regularly said, “Although it is hard to live in South Hamkyong, people who made it through the ‘March of Tribulation’ know very well how to survive. There are newly harvested potatoes, and if you are really struggling then you can always eat herbs.”

NK Intellectuals Society (NKIS), a leading defector organization, agrees that the report is false, saying, “We have checked the report of widespread starvation in South Hamkyong with a resident of Danchon, and he has confirmed that no such thing has happened. Some elderly people with immune systems weakened by spring food shortages have died of disease, but that number is not more than ten or twenty in Danchon.”

Good Friends has tended to warn of impending mass starvation almost every year, but inside informants and the South Korean authorities often assert otherwise.

In a separate report, Good Friends also recently claimed that there was to be no more public distribution as of late last month, and that market transactions had been fully liberalized to allow the people to look after themselves.

The so-called “May 26th Measure”, Rev. Bomryun of Good Friends said at the time, was “reluctantly done as a result of a lack of the anticipated food aid from China after Kim Jong Il’s visit,” and claimed, “This time, the starvation cannot be dealt with over a short period of time, and might result in a larger number of deaths like in the mid-1990s.”

However, the actual existence of the May 26th Measure has not been proven, and markets in Sinuiju, Pyongyang, Hyesan and other main cities remain open from 10 AM to 6 PM as normal.

Won Sae Hoon, South Korea’s National Intelligence Service chief, also testified before the National Assembly’s Intelligence Committee last Thursday that North Korea probably has enough food overall to survive, saying, “This year, North Korea seems to have more than 4.3 million tons of grain, including its own production and imports, and food supply difficulties can be managed.”

Read the full story here:
Starvation Report Rejected by Sources
Daily NK
Shin Joo Hyun
7/2/2010

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Posted in Food, General markets (FMR: Farmers Market), Good Friends | Comments Closed

Life tough in Pyongyang

Tuesday, July 6th, 2010

According to the Daily NK:

The gap between the rich and poor in North Korea is growing as the number of people trying to sell their family home to buy food expands in the aftermath of last November’s currency reforms, according to a source from inside the country.

The source from South Pyongan Province told The Daily NK on Thursday, “An increasing number of homes are being sold to buy food, and now it seems like about two out of every ten people around here have lost their home.”

According to the source, the rich buy up the houses, demolish them and build new ones to sell for a profit. Those who have amassed dollars or Chinese Yuan from trading are now turning to the housing market.

Even in Pyongyang, where the public distribution system continues to function, there are homeless people on the street, according to the source, who added, “When I was in Pyongyang, there were homeless people sleeping in the subway in large numbers.”

The source went on, “People’s lives are very difficult. There are even some who rely on digging up 5kg of wormwood, walking three hours to sell it, and only getting 100 won per kg.”

Currently, 1kg of rice sells for 400 to 500 won in Pyongyang, and 500 to 600 won in other areas.

The source also explained, “While public distribution still functions in Pyongyang, there are strict restrictions on movement, and even with our salaries we can’t buy food because there is too little.”

Since the economy is so bad, the crime rate is also going up, he added, “There are now more and more pick pocketing cases, and these days, they not only use small knives to steal purses, but even tweezers to pick stuff from pockets.”

The source’s assertion that there was public distribution until mid-June contradicts the claim of one NGO, which said that on May 26 the authorities ordered each area to look out for its own food supply. The source, when asked about the decree, said he was unaware of its existence.

Read the full story here:
Life Even Tough in Pyongyang
Daily NK
Kim So Yeol
7/2/2010

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Posted in Agriculture statistics, Civil society, Crime, Food, General markets (FMR: Farmers Market), Price liberalization, Public Distribiution System (PDS), Real estate, Statistics | 1 Comment »

Kim Jong Il, the reformer?

Monday, June 28th, 2010

Bradley Martin, author of Under the Loving Care of the Fatherly Leader, writes in the Global Post:

Now that food shortages reportedly have forced North Korea to reverse its crackdown on capitalist-style markets, more systematic reforms for its collapsed economy may not be far behind.

The markets policy reversal came May 26 in directives issued by the cabinet and the ruling Workers’ Party to subordinate organizations, according to a report by the Seoul-based newsletter North Korea Today, which gets its information from officials and ordinary citizens inside the North. “The government cannot take any immediate measures” to relieve a food shortage that is “worse than expected,” the newsletter quoted one of the directives as saying in explanation for the policy change.

The same authorities only late last year decreed a sudden currency revaluation that crippled the “anti-socialist” markets, where stallholders had been trading for individual profit, by confiscating the traders’ wealth. The new decrees bless and deregulate what’s left of the markets, which have shrunk and in some cases closed completely in the interim, in the hope that market trading will keep people from starving. And the directives instruct managers of state-run enterprises to pursue lucrative deals — especially in foreign trade — that could help feed their employees.

This could all turn out to be the big event that finally pushes the very reluctant leadership into a multi-year campaign of serious reforms of the sort that began decades ago in Vietnam and China, according to Felix Abt, a Swiss involved in North Korean joint ventures in pharmaceutical manufacturing and computer software.

“Given an industrial stock and an infrastructure beyond repair, and the impossible task of maintaining a huge army, economic reforms appear unavoidable in the very near future,” Abt, a former president of Pyongyang’s European Business Association, wrote in an email exchange.

“It looks intriguing and it reminds me of Vietnam’s history of reforms,” said Abt, who did business for years in Vietnam before going to Pyongyang and recently has moved back to Vietnam while maintaining his involvement in North Korea.

“The Vietnamese economic situation looked dire at the beginning of the 1980s,” he explained. “Nguyen Van Linh, party secretary in Ho Chi Minh City, favored moderate economic reforms. He tried too early, lost his job and left the political bureau in 1982.

“Le Duan, secretary general of the Communist Party, was categorically against any economic reforms. He died in 1986, the year of the five-year party congress which brought Nguyen Van Linh back and elected him as his successor. The new party secretary general immediately launched the Doi Moi policy — ‘reforms.’”

Abt ventured the lesson that triggering reforms “takes something big like the death of a leading politician” in Vietnam — or, in North Korea, a “ruinous” currency revaluation.

Not every foreigner who has had firsthand economic dealings with North Korea is convinced the recent events constitute that trigger. Some worry that U.S.-led sanctions could nip any flowering of capitalism in the bud.

“The problem is still U.S. Treasury’s attitude,” said one such foreigner, who asked not to be identified further. Treasury Department officials began working several years ago to take North Korea “out of the international banking system,” discouraging trade, he noted.

Some U.S.-sponsored sanctions subsequently were eased in an effort to persuade Kim Jong Il to negotiate away his nuclear weapons capability, but after those talks went nowhere — and especially after North Korea allegedly torpedoed a South Korean warship earlier this year — enthusiasm for compromise cooled. Recent reports say Washington is moving toward aggressively strangling cash flow into the country.

There is also the argument that Kim believes he cannot afford to reform the economy because it would let in information and influences that would undermine his family’s rule by letting his isolated subjects learn that the rival South Korean system works much better.

According to Abt, one answer to both concerns could be China, which “will provide all the support necessary to the DPRK party and government to enable economic reforms without regime change.” He used the abbreviation of Democratic People’s Republic of Korea, the country’s official name. “The DPRK may expect support from other quarters, for example, the European Union, too,” he said.

“I think the dilemma of the leadership — economic upsurge versus the inflow of ‘subversive’ system-destabilizing information and ideas, particularly regarding the South — can be overcome with the necessary Chinese support,” Abt said. “Though the division of Korea can only be compared with that of Germany before 1990, China’s division — capitalist Hong Kong, capitalist Taiwan — was a sort of challenge to Deng Xiaoping and successors, too, but they learnt to manage that quite well.”

Read the full the story here:
Analysis: Kim Jong Il, the reformer?
Global Post
Bradley Martin
6/24/2010

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Posted in Cabinet, Economic reform, European Business Association, General markets (FMR: Farmers Market), Worker's Party | 4 Comments »

North Koreans hoarding Yuan

Thursday, June 24th, 2010

According to Radio Free Asia:

North Koreans who can afford to save their money are ignoring a new currency brought in by the ruling Workers’ Party in the isolated Stalinist state in favor of the more trusted renminbi yuan from China.

“Our [North Korean] money is now called ‘the commoners’ currency,’ used only as a means of exchange when goods are purchased, but not as a means of saving,” a resident of Chungjin city in the northern province of Hamgyeong said.

“North Koreans [still] hold their savings in Chinese money,” the resident said.

On the country’s black markets—the chief source of essential goods for many under a planned economy in which products are scarce and often monopolized by the country’s elite—any buyer offering to pay in yuan can expect a large discount, residents say.

“Nowadays even children look for Chinese money, knowing that a hefty discount may be available if Chinese money is used in an exchange,” another source said, speaking during a visit to relatives in the northeastern Chinese city of Dandong, which borders North Korea.

The renminbi—known in North Korea simply as “B”—is strongly preferred to the local currency, as it can buy anything, the second source added.

Purported crackdown

North Korean authorities including the state security department claim to be cracking down on the use of the yuan for transactions, he said.

“But because high-ranking officials are the first to hold their savings in Chinese money, the implementation of such crackdowns is half-hearted at best, and mostly ineffective,” the source said.

“North Korean officials won’t even touch the domestic currency.”

Other sources said they fully expect the North Korean currency to collapse once enough yuan are in circulation to fuel the country’s black markets.

“It is obvious that the North Korean currency will collapse once more money enters circulation,” a third North Korean said.

That source, who like the others spoke on condition of anonymity, said the apparent stability in the North Korean currency is an illusion caused by the fact that not enough money is in circulation for it to devalue domestically.

The tight money supply partly results from nonpayment of salaries by the government, the country’s only official employer.

“In Sinuiju, only 25 percent of the people have received their salaries,” the third source said.

“Workers and those employed at manufacturing facilities received the appropriate pay only during the month after the currency reform was implemented, and then started missing paychecks,” the third source said.

Devaluation crisis

The South Korea-based Web site “Daily NK,” which publishes North Korean news, said North Koreans who use domestic currency, rather than Chinese yuan or U.S. dollars, have to pay about 10 percent more for their purchases in open markets.

North Korea issued its revalued won last December, dropping two zeroes off the old won.

At the time, the North Korean central bank put strict limits on the amount of old money that could be exchanged for the new won.

At the old rate, U.S. $1 was equal to 135 North Korean won.

The move sent shockwaves through North Korea, with reports of citizens rushing to black-market moneychangers to cash in their won for more stable U.S. dollars and Chinese yuan.

North Korean citizens were threatened with “merciless punishment” for defiance of the new currency rules and were told they had only a week to exchange a maximum of 100,000 won (U.S. $690 at the official rate, but less than U.S. $40 according to black market rates) per person of the old currency for new bills.

NGOs in Seoul reported that in response to widespread anger, those limits were raised to 150,000 won in cash and 500,000 won in bank notes.

A leading expert on the North Korean economy has said that the economic system is split between the concerns and needs of ordinary North Koreans and the country’s political elite, which runs a “royal palace economy.”

Kim Kwang Jin, visiting researcher with the U.S. Committee for Human Rights in North Korea, said the scale of Kim Jong Il’s “royal palace economy” is in the hundreds of millions of dollars a year, while the much less significant “people’s economy” doesn’t exceed a few million dollars a year.

Read the full story here:
North Koreans Shun New Won
Radio Free Asia
Sung Hwi Moon
6/23/2010

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Posted in Banking, Black markets, Finance, Fiscal & monetary policy, General markets (FMR: Farmers Market) | 2 Comments »

More reports of easing market regulations

Friday, June 18th, 2010

According to the Washington Post:

Because North Korea operates in secrecy and isolation, outside observers rely on informants and accounts from defectors. In this case, experts agree that the food shortage is dire. Several analysts who monitor and travel to North Korea agree that in recent weeks, Pyongyang has abandoned almost all rules about who can spend money and when. That would seem to indicate that Kim — who once equated free-market trading with “egotism” and a collapse of social order — now wants to rehabilitate markets that were damaged months earlier.

As of May 26, the government no longer forces markets to close at 6 or 7 p.m., has dropped the rule restricting customers to women older than 40 and has lifted a ban on certain goods being sold. One city official in the city of Pyungsung informed the Good Friends humanitarian group that the living standard had “drastically decreased since the currency exchange, and the government cannot provide distribution so they have to bring the market back up.”

Read the full article here.

IFES has also reported this move.

It should be noted that both of these reports cite this Good Friends report:

Blanket Permission to Open Markets “Everyone can do business”
Authorization of public market is included at the core of the 5.26 Party directives. The North Korean authorities decided to allow everyone to have access to markets and overturned their original plan to close down the general market and exercise strong control over market. They announced that there will be no time restrictions, product control or age limitation. In reality, they allowed Democratic Women’s Union’s weekly prohibition from market operation during official work so people can work at market regardless of Democratic Women’s Union hours. Their only condition was to participate in labor mobilization. Pyungsung City, which suffered the most since last year’s decision to prohibit general market, is now allowed to open business and cancel other market regulations. A city official described the background on allowing of the market, “The living standard drastically decreased since the currency exchange and the government cannot provide distribution so they have to bring market back up.” He added, “There are increasing deaths from starvation so opening market is a reasonable resolution. Death due to starvation has gone out of control.” However, although the market doors are open wide, products are not being distributed and there is no cash flow. Market has shrunk that a businessman who used to make 3,000 won a day is barely making 200-300 won a day.

Good Friends is a valuable source of information but their reports should be taken with a grain of salt.

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Posted in Food, General markets (FMR: Farmers Market), Good Friends | 1 Comment »

DPRK abandons food rations, orders self-sufficiency

Thursday, June 17th, 2010

Institute for Far Eastern Studies (IFES)
NK Brief No. 10-06-17-1
6/17/2010
 
As North Korea’s food shortages worsen and reports of starvation continue to grow, the Workers’ Party of Korea have acknowledged the failure of the central food ration program. Since the end of May, the Party has permitted the operation of 24-hour markets, and the regime has ordered the people of the North to provide for themselves.

The human rights organization Good Friends reported this move on June 14. According to Good Friends, the Workers’ Party organization and guidance bureau handed down an order on May 26 titled ‘Relating to Korea’s Current Food Situation’ that allowed markets to stay open and ordered North Koreans to purchase their own food. This order, recognizing that the food shortages in the North have continued to worsen over the last six months, since the failed attempts at currency reform, acknowledged the difficulty of providing government food rations. It calls on those who were receiving rations to now feed themselves, while also calling on the Party, Cabinet, security forces and other relevant government agencies to come up with necessary countermeasures. Now, authorities officially allow the 24-hour operation of markets, something that most had already tacitly permitted, and encourage individuals, even those not working in trading companies, to actively import goods from China.

It has been reported that government food rations to all regions and all classes of society, even to those in Pyongyang, were suspended in April. The last distribution of food was a 20-day supply provided to each North Korean on April 15, the anniversary of the birth of Kim Il Sung. Because of the difficulty of travelling to markets, the suspension of rations caused many in farming communities to starve to death. When Kim Jong Il’s recent visit to China failed to secure expected food aid, the Workers’ Party had no choice but to hand down the ‘May 26 Party Decree’. While the suspension of rations has considerably extended the economic independence of North Korean people, the regime has significantly stepped up other forms of control over society. Public security officers have begun confiscating knives, saws and other potential weapons over 9 centimeters long in an effort to stem murder and other violent crimes. Additionally, state security officials are cracking down on forcefully resettling some residents of the age most likely to defect, while sending to prison those thought to have contacted relatives in South Korea.

According to Daily NK, North Korean security officials are pushing trading companies to continue trading with China, while calling on Chinese businesses to provide food aid. It also appears that North Korean customs inspections along the Tumen River have been considerably eased, and there is no real attempt to identify the origin or intended use of food imported from China. Sinheung Trading Company has asked Chinese partners investing in the North to send flour, corn and other foodstuffs. The Sinheung Trading Company is operated by the Ministry of State Security, and is responsible for earning the ministry foreign capital. It appears that food acquisition is now a matter of national security, as North Korea is expecting South Korea and the rest of the international community to economically isolate the country.

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Posted in Agriculture, Banking, Black markets, Finance, Food, General markets (FMR: Farmers Market), Good Friends, International Aid, International trade, Ministry of State Security (MPSS, NSA, SSD), Organization and Guidance Department, Public Distribiution System (PDS), Sinheung Trade Company, Worker's Party | 1 Comment »

DPRK allegedly halts rations

Monday, June 14th, 2010

According to the AFP:

North Korea has completely cut off state food rations after China failed to supply the impoverished communist country with extra cereals, a welfare group said Monday.

The ruling communist party announced in a directive on May 26 that there would be no state rations for a while, said South Korea’s Good Friends group which has contacts in the North.

People were authorised to buy food supplies through private markets, it said, adding the directive was due to delayed shipments of food from China.

“The directive was unavoidable” because China failed to send the aid which had been anticipated after leader Kim Jong-Il’s trip to Beijing in early May, group president Pomnyun, who uses just one name, told reporters.

Private markets are now open around the clock across the North, he said.

The North suffered famine in the mid-1990s which killed hundreds of thousands and it still grapples with severe food shortages. The UN children’s fund estimates one third of children are stunted by malnutrition.

The state food distribution system collapsed during the famine. Free markets sprang up and were condoned for a time.

Since 2005 the regime has been reasserting its grip on the economy, with controls or outright bans on the private markets.

A currency revaluation last November, designed to flush out entrepreneurs’ savings, backfired disastrously, fuelling food shortages as market trading dried up and sparking rare outbreaks of unrest.

The North was forced to suspend its campaign to curb the private markets.

Read the full story here:
N.Korea completely cuts off state rations: aid group
AFP
6/14/2010

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Posted in Agriculture, China, Food, General markets (FMR: Farmers Market), Good Friends, International Aid, Public Distribiution System (PDS) | Comments Closed

The effects of the DPRK’s currency revaluation

Thursday, June 10th, 2010

The New York Times published a lengthy article on the DPRK’s currency reform effort launched last year.  Excerpts below:

Like many North Koreans, the construction worker lived in penury. His state employer had not paid him for so long that he had forgotten his salary. Indeed, he paid his boss to be listed as a dummy worker so that he could leave his work site. Then he and his wife could scrape out a living selling small bags of detergent on the black market.

It hardly seemed that life could get worse. And then, one Saturday afternoon last November, his sister burst into his apartment in Chongjin with shocking news: the North Korean government had decided to drastically devalue the nation’s currency. The family’s life savings, about $1,560, had been reduced to about $30.

Last month the construction worker sat in a safe house in this bustling northern Chinese city, lamenting years of useless sacrifice. Vegetables for his parents, his wife’s asthma medicine, the navy track suit his 15-year-old daughter craved — all were forsworn on the theory that, even in North Korea, the future was worth saving for.

“Ai!” he exclaimed, cursing between sobs. “How we worked to save that money! Thinking about it makes me go crazy.”

North Koreans are used to struggle and heartbreak. But the Nov. 30 currency devaluation, apparently an attempt to prop up a foundering state-run economy, was for some the worst disaster since a famine that killed hundreds of thousands in the mid-1990s.

(more…)

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Posted in Banking, Finance, Finance and Accounting Department, Fiscal & monetary policy, Food, General markets (FMR: Farmers Market) | Comments Closed

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