[imText1]An U.S. expert on North Korean economics, Dr. Marcus Noland Senior Fellow at the Institute for International Economics (IIE) presented a report “The North Korean Refugee Crisis: Human Rights and International Response” in Seoul on the 13th and said that in respect to the food economy, North Korea has become an extensive market economy.
The report was based on interviews with 1,346 defectors in China indicated that only 3% of North Koreans are relying on the public food distribution system (PDS) whereas the majority of participants responded that the marketplace was where the majority of food is obtained.
Following the presentation, I met with Dr. Noland seeking his response on the future growth of North Korea’s market economy.
He explained “Since the 1990’s, North Koreans formed markets so that they would not die of hunger and hence the black market economy spread” and “In order to regulate and control the country, North Korean authorities the 7.1 Economic Management Improvement Measure in 2002.”
Dr. Noland revealed “Though it has not been mentioned in the report, another report is being prepared which will compare North Korea’s economic situation before and after the 2002 7.1 measures” and “We are planning to survey people who have left North Korea before and after 2002, to compare the different perceptions of the North Korean economy.”
Also, regarding speculations made by international lobby groups which predict mass starvation in the following spring, Dr. Noland said “Although the situation has become severe, it is unlikely that mass starvation like the 1990’s will occur.”
On the other hand, in regards to the reconvening of six party talks in Beijing on the 18th, Dr. Noland said “Everyone knows that the North Korean regime will not comply to the international mutual agreement” and “To tell you the truth, my expectations for these talks are rather low.”
[Following is the full interview]
[imText2] – Please explain the analysis that North Korean’s food economy has become a market economy.
Normally, wherever the country, new economic proposals are made in order to achieve political and economic aims. However, amidst a situation where the nation cannot fulfill its role, it is the government that is responding to North Korea’s market economy that has been created by the people.
The emergence of a market economy in North Korea is something that largely surfaced from the black markets which materialized in the 1990’s. The markets emerged as people would have died of hunger relying only on the PDS.
The economic reforms in 2002 were merely recognition of the markets as a means to revitalize the food crisis. Rather, it was a strategy to restore control and management of the already formed market economy.
– Could we view this situation to represent the bulk of North Korea’s economy?
Although it is not included in this report, a survey is currently underway comparing the awareness and experiences of the economic issue by studying defectors who left North Korea before and after 2002.
We can understand the changes to North Korea from the creation of black markets which has further led to a free market economy. However, in addition to this, family background and education as well as birthplace could affect the awareness of the market economy.
Also, as 67% participants of this survey were defectors from North Hamkyung, there is a possibility that the role of the market in distributing food was greatly increased and hence is may not be an accurate paradigm for the rest of the country.
– Following the nuclear experiment, the international community reduced its aid and coupled with the summer flood damages, there has been concerns that next year will foresee a mass starvation.
As you know, last year the North Korean government stated circulation of food as an act of crime and seized food from rural districts. In addition to these negligent acts, humanitarian lobby groups were not allowed to work in these areas.
The moment humanitarian lobby groups were expelled from North Korea we lost the signals which indicated the extent of North Korea’s food crisis. Furthermore, for the past 6 months, following the missile launch and nuke experiment, the situation has worsened dramatically.
Though it is my own prediction, I think it is unlikely that mass starvation like the 1990’s will occur, but I do think that the overall situation will deteriorate. In particular, north-eastern areas of North Korea such as Chongjin will experience even greater severity.
– The six party talks will reconvene on the 18th. Until now, the position of the U.S. and North Korea has been significantly different. What are your thoughts on this?
To tell you the truth, my expectations for these talks are rather low. Everyone knows that the North Korean regime will not comply to the international mutual agreement. In regards to nuclear and militaristic issues, even amidst the best situation, comprehensive negotiations at the talks will be difficult due to the question of security.”
Though I have low expectations, the most important thing is that the North Korean government is continuously brought forward for talks and that action is taken in accordance to international focuses.