by Marcus Noland, Peterson Institute for International Economics
Op-ed in DailyNK
March 16, 2011
The food situation in North Korea again appears to be deteriorating.
Roughly two-thirds of the grain consumed in North Korea is produced locally, so the size of the domestic harvest matters for food security. The harvest, in turn, depends on both the weather and the availability of inputs such as fertilizer. During the last harvest cycle the weather was sub-optimal, and North Korea's poor diplomatic relations with South Korea have resulted in a reduction in South Korean aid, in terms of both food and agricultural inputs. Although the United Nations' Food and Agriculture Organization (FAO) estimated that the 2010 fall harvest was slightly above the previous year's, the 2011 spring harvest is now expected to be significantly lower than initially projected, so that heading into the "lean months" of mid-2011, domestically produced supply will be down relative to the previous year.
North Korea receives food aid bilaterally from China and South Korea and multilaterally through the World Food Program (WFP), to which the United States is the largest donor. Imports on commercial terms are limited. However, both commercial imports and aid are affected by global prices, which are now rising. Higher world prices are likely to contribute to a reduction of commercial imports.
Aid could be affected as well. There is an understandable tendency to interpret aid policy as a function of diplomatic maneuvering and as a consequence ignore the role of domestic political considerations in determining outcomes. A Chinese reduction in aid in 1993, undertaken in response to rising grain prices at home, was the proverbial straw that broke the camel's back and sent North Korea into famine. A similar episode played out in December 2007, when in response to rapidly rising grain prices, China embargoed exports, including those to North Korea, contributing to the biggest intensification of hunger since the end of the famine period. The current backdrop of rising world grain prices does not augur well for the availability of external supply via any channel.
Local prices appear to be rising much more rapidly than world prices, however, possibly due to high levels of inflation in the wake of the failed currency reform, as well as removal of supply from the market to restock inventories maintained by the North Korean military and possibly to build up inventories for political celebrations.
It is impossible to know with any precision what this means for food security. The FAO/WFP balance sheet exercises are flawed and at the aggregate level overstate the actual level of distress. Additionally, these balance sheet exercises ignore inventory effects. If recent reports are to be believed, inventory building is likely to be reducing effective supply.
Moreover, the distribution of food insecurity is highly uneven in North Korea, both geographically and socioeconomically, and even apparently adequate supply at the macro level may disguise what could be severe distress in specific locales or among particular population groups. A recent assessment by a consortium of American nongovernmental organizations (NGOs) reports intensifying distress in three provinces which were visited. Among other things, the report documents cuts in rations delivered by the government-run rationing system, extraordinary shares of household income devoted to the purchase of food, and eyewitness accounts of acute malnutrition among children and a prevalence of low birth-weight newborns.
Unfortunately, the North Korean government has never exhibited any real "buy-in" to the norms of humanitarian assistance as practiced elsewhere around the world. As a consequence of this fundamental lack of cooperation by the recipient government, the quality of the official multilateral aid program in North Korea has never met international standards. Anecdotal accounts suggest that relative to the WFP, the American NGOs were able to achieve a higher level of effectiveness during their involvement in 2008. Recent North Korean provocations have further undercut political support among major donors, with the possible exception of China.
The ultimate solution to North Korea's chronic food insecurity is a revitalization of the North Korean economy, which would allow the country to earn foreign exchange and purchase bulk grains from more efficient producers worldwide. But the state fears the market and is reluctant to embrace the reforms necessary to achieve this outcome, however, and if anything, economic policy is heading in a negative direction.
The tragedy of North Korea is that while the circumstances of many are abysmal, the government is almost wholly unaccountable for its manifest failures. Humanitarian aid is needed and should be divorced from politics. We should not punish poor families in Chongjin or school children in Wonsan for the behavior of a government over which they have no influence. In practical terms this puts us back in the slog of trying to achieve the best outcomes possible given the fundamentally uncooperative stance of the North Korean government. We appear to care more about vulnerable North Koreans than their own government does.
Book: Witness to Transformation: Refugee Insights into North Korea January 2011
Peterson Perspective: North Korea's Immunity to Outside Pressure: Part I December 12, 2012
Policy Brief 10-1: The Winter of Their Discontent: Pyongyang Attacks the Market January 2010
Working Paper 10-2: Economic Crime and Punishment in North Korea March 2010
Paper: FTAs and the Future of US-Korean Trade Relations November 2009
Paper: Implementing the KORUS FTA: Key Challenges and Policy Proposals February 2008
Policy Brief 08-6: North Korea on the Precipice of Famine May 2008
Policy Brief 07-7: The Korea-US Free Trade Agreement: A Summary Assessment August 2007
Policy Brief 06-4: Negotiating the Korea–United States Free Trade Agreement June 2006
Working Paper 07-7: North Korea’s External Economic Relations August 2007
Book: Avoiding the Apocalypse: The Future of the Two Koreas June 2000
Book: Free Trade Between Korea and the United States? April 2001
Working Paper 08-4: Migration Experiences of North Korean Refugees: Survey Evidence from China March 2008