The Food and Agriculture Organization of
the UN reported that North Korea’s 2014 crop production reached 5.03
million tons, while demand was expected to reach 5.37 million tons, posting an
approximate deficit of 340,000 tons. Still, the country’s food deficit has been
decreasing, with the same the report indicating figures dropping
gradually from 1.09 million tons in 2011 to 340,000 tons in 2014. The reduction
in the deficit shows that food productivity is at its highest since before the
“Arduous March,” the famine gripping the nation in the mid-1990s.
The implementation of the pojeon managing
system in 2013
Two reasons are believed to be behind this
increased food production . Firstly, more fertilizer and farm equipment have
been imported from China and distributed to farm cooperatives. Secondly, a
program of encouraging people to cultivate smaller plots of land in smaller
has been implemented. The April 2014 issue of “Homeland,” a monthly
magazine produced by the General Association of Korean Residents in Japan,
reports that the implementation of these smaller units within the larger cooperative farm system increased grain productivity in 2013.
The magazine noted that the grain
productivity of 2013, the best since before the onset of the
“Arduous March,” can be attributed to this system and not environmental factors
like favorable weather. The Wonhwa farm cooperative in South Pyongan Province
was particularly noted as a model cooperative. In this case, the magazine stated that the implementation
of the program gave the farmers a greater sense of responsibility, in turn raising their production levels and allowing them to receive an average of one ton of produce per person.
Chosun Central TV [KCTV] reported on
January 31st, 2014 that a national conference of farm cooperative managers was
held in Pyongyang. The managers were received by Kwak Pom Gi, the Chairman of
the People’s Assembly Budget Committee, as well as Ri Chol Man, the vice
premier-cum-Minister of Agriculture. Although many national farming conferences
have been held in the past, it was the first ever to invite only the
lowest-ranking bunjo [cooperative farm production unit] managers. This reflects the state’s will to further its
agricultural reform represented by the pojeon managing system.
A March 28th, 2014 editorial in the Rodong
Sinmun praised model cooperative farm units and held them as examples to be followed. These
media reports show that the state attributes the exceptional 2013 increase in
food production to the pojeon management method, and based on efforts to further
establish this system, it appears likely that the North will move forward with
this reform in agriculture.
Nineteen Special Economic Zones
In 2013, North Korea expanded its
department on national economic development, which was set up to implement
development plans for the coming decade, to a commission. On the same day it
made this announcement, Pyongyang launched the State Economic Development
Committee, jointly run by private and public groups to support the development
of its special economic zones and help foreign investors. The association invited
roughly a dozen experts from other countries including the U.S., Hong Kong,
Vietnam, and India to hold a symposium. At the gathering, an official from the
group announced a special economic zone would be established in each province,
and following this, a second symposium took place in May last year at the
Yanggakdo International Hotel in Pyongyang, according to the Chosun Central
News Agency [KCNA].
On May 29th, 2013, North Korea adopted the
Economic Development Zone Law, announced it would create 13 provincial
special economic zones and one central economic zone. Aside from the central
special zones in Rasun, Hwanggumpyong and Wihwa Island, Geumgang Mountain, and
Kaesong Industrial Complex, the North has been working to open more local
economic zones, signaling intentions to further expand on this plan. In
July 2014, the North changed the designation of Sinuiju Special Economic
Zone to an international economic zone and added six more economic
development zones in other areas including Pyongyang and Nampo.
The 19 provincial economic zones include
the Onsong tourist zone and Eorang agricultural zone in North Hamkyung
Province, as well as Waudo export and manufacturing zone in Nampo City. The
small economic development zones aim to utilize local characteristics and are
roughly 2-3 km² in size, with the scale of foreign investment estimated to
stand at roughly 100 million USD. The investment proposal for these zones
outline the North’s plans to develop roughly 44.3km² in a total of 13 areas.
Each of these zones is known to have proposed receiving a minimum of 70 million
up to a maximum 240 million USD in foreign investment.
The Chinese city of Tumen and the State
Economic Development Committee signed an agreement on December 9, 2013, for a
development plan involving Onsung. In mid-November 2013, a similar contract to develop the Kangryong International Green Model Zone involving joint funding from
Singapore, Hong Kong, and China was signed.
The groundbreaking ceremony was
held in February 2014 for the Sinuiju Special Development Zone; this project is
to be funded by a firm in Hong Kong . The KKG group, another company in Hong Kong , is in talks to construct work spaces and dorms for the “Kaesong
Hi-tech Research and Development Lab”. The objective of the lab is said to be
to produce high-quality software for Chinese and other foreign firms.
Russian Railways and the Port of Rasun
created a joint company named RasonKonTrans. Since 2008, the
Rajin-Khasan project has been underway, involving the construction and repair
of a 54km railway connecting Russia’s Khasan Station in the Far East and the
North’s Rajin Port. It also includes plans to modernize the Rajin port
and launch projects in the distribution industry.
Increasing liberalization toward China
North Korea’s reliance upon China has
increased after the international community levied even more sanctions on the
North after its 2009 second nuclear test and the 2010 sinking of the
Cheonan, a South Korean naval corvette. Despite the stronger sanctions, North
Korea has seen a high rate of increase in food production and trade, which can be seen as the result of two changes: the North’s greater openness toward
China and elements of the market economy introduced in North Korea.
The joint development of free trade areas
in Rasun, Hwanggumpyong Island, and Wihwa Island between North Korea and China
show that North Korea is taking a more liberal approach towards China. Although
joint development at the national level has stalled after Pyongyang’s third
nuclear test small scale investments across regional governments and companies
have been blossoming. Trade between the two countries had been on a gradual
rise until 2010, but in 2011 it jumped to 5.63 billion USD and has been on a
steady uptrend until 2013. Estimates indicate in 2014, trade will stand at
similar levels to 2013 (at 6.54 billion USD). When excluding trade with the
South, China makes up for over 90 percent of North Korea’s trade.
Thirdly, there has been an explosion in the
number of workers going to China and Chinese tourists visiting North Korea. The
number of North Korean workers who received a Chinese work permit in 2013
was estimated to be at roughly 90,000. Tourism is another area
North Korea is focusing on as means to obtain foreign currency. While 96,000
tourists visited North Korea in 2009, this jumped to 130,000 in 2010, 190,000
in 2011, and 237,000 in 2012, posting a 2.5-fold increase in the span of three
years, according to China’s National Tourist Office. (To be continued)
