The latest “KDI Review of the North Korean Economy” was issued by the Korea Development Institute on June 30. Its key conclusion is that North Korea is facing another March of Tribulation, just like the famine which followed shortly after Kim Il Sung’s death in 1994.
“Considering its surroundings and situation, the [economic] difficulties North Korea faces currently seem as serious as the ones in 1994, when it was in the midst of a nuclear crisis and coming to terms with the death of Kim Il Sung,” the report asserts. So, is North Korea really facing massive starvation just like the period of the March of Tribulation?
In short, the answer is “no.”
Every year, experts in various quarters insist that a second famine and massive starvation are impending, but their predictions have turned out to be false every time.
It is unquestionably true to say that these days North Korea has substantial difficulties; Kim Jong Il’s health; the risk of unrest during the succession process; frosty inter-Korean relations and international sanctions against entities and individuals in the state. However, although North Korea is in trouble, the food situation is far from rock bottom.
We know this because now we have a tool we can employ to establish the North Korean food situation accurately: the jangmadang, North Korea’s system of markets. In the jangmadang, the principles of the free market are at work: supply and demand. If North Korea were facing massive starvation due to food supply, prices in the jangmadang would skyrocket.
However, current rice prices are unusually stable, as this radio transcript explains;
“On June 23, the results of an investigation into food prices were released which show that in Pyongyang, one kilogram of rice sold for 2,000-2,200 North Korean won in May, falling to 1,900-2,000 won in June. Prices stayed around 2,300 won for one kilogram of rice in both May and June in the Northern border city of Hyesan. In the case of Hoiryeong, rice prices initially rose from 2,200 to 2,700 won for one kilogram from May to June, but had fallen back below 2,200 towards the end of June. And in Shinuiju, a price of 2,200 won dropped to 2000 won during May, showing that prices are and have been consistently low.” (Open Radio for North Korea, July 13)
[imText1]All of which is true despite reinforced international sanctions following the nuclear test on May 25, whereas, in 2008, food prices made life very tough, with the price of one kilogram of rice soaring to 4,000 won, nearly double it’s current average level.
For their part, the KDI claims that this price stability is because real purchasing power among citizens has weakened, and that it does not indicate food security at all, quite the opposite.
That is to say, the supply side isn’t governing prices, the demand side is.
Why did the purchasing power of the average citizen decrease, according to the KDI? The KDI explanation is the burgeoning inequality between rich and poor.
However, the growing gap between rich and poor is not news; it has been growing for a number of years.
In fact, however, there are other ways to look at the problem. While purchasing power is declining and demand for rice decreasing, demand for corn-rice is increasing. Corn-rice is dried corn kernels roughly the same size as grains of rice. People cook it in the same way as rice, as a cheap substitute for rice. Corn-rice prices are generally around half those for real rice.
The KDI does not, however, factor substitute foods into its analysis.
In Shinuiju, corn-rice was 1,100 won, about half the rice price, in late June. In Hoiryong and Hyesan, corn-rice prices were also around half those for rice, at 1,200 won. It was also around half the price of rice, 900-1,000 won, in Pyongyang.
Many experts, including the KDI, tend to believe that North Korea’s food situation is inevitably serious, so they tend to presume that North Korea will face massive starvation every year.
For example, in a Radio Free Asia interview with WFP’s spokesperson Paul Risley on July 19, we learned that the WFP worries that if food aid to North Korea is not increased, many will suffer from malnutrition, with the possibility of deaths.
However, in reality the food situation is not as serious as in other years.
Therefore, what are the real reasons why the food situation is decent in spite of international pressure?
First, North Korea passed through the usual springtime hardships in April and May. In North Korea, new crops such as new potatoes and new barley begin to be harvested around late June. At that time the prices that rose during the difficult season in spring start descending. This year was no different.
Second, although regulations against defection were reinforced following the nuclear test on May 25th, there have not been any measures to block imports of food. As a result, food trade through the border between China and North Korea has continued as before.
Third, even the food trade within North Korea has not been regulated in the jangmadang. There have been innumerable rumors about the closure of the jangamdang, but nothing has come of them.
Of course, that is not to say that nobody will die of starvation.
In today’s North Korean society, as in any other poor country, those who do not have money to buy food run the risk of dying of starvation. However, this is not due to a lack of the absolute quantity of food, but due to the lack of welfare payments on the part of the North Korean regime. It is not a problem which can be solved by giving more international food aid. The solution is for the regime to provide the people in poor classes with money to buy food.
Nevertheless, in conclusion, according to the genuine economic data that the jangmadang has given us, during the first half of this year the food situation was reasonable. Institutional analysts are incorrect; North Koreans do not face mass starvation, not this year.
However, this does not in any way guarantee that there will be no food crisis again. It is important to be vigilant, and observe how the floods which have come about as a result of the exceptionally harsh 2009 rainy season affect harvests from here on.
