by Stephan Haggard, University of California, San Diego
and Marcus Noland, Peterson Institute for International Economics
and Erik Weeks, Peterson Institute
Op-ed published through openDemocracy
May 20, 2008
Amid the extensive reportage and analysis of the world's food insecurity in the first few months of 2008, the desperate circumstances of people in North Korea have been relatively neglected. Yet the country—which suffered a catastrophic famine in the late 1990s, in which perhaps one million people died—is again on the brink of famine. The margin of error between grain requirements and available supply has virtually disappeared and may be as low as 100,000 metric tons of grain, equivalent to less than two weeks of human needs. Local food prices are skyrocketing faster than world prices. Aid relationships have been soured, and even if current negotiations over the United States offer of a very large food-aid package to North Korea of 500,000 metric tons of grain succeed, there are real questions about whether the supplies can be delivered in time.
Indeed, reports of severe malnutrition and deaths have already begun to filter out of the country; the situation is so bad that hunger-related deaths are nearly inevitable. The North Korean regime's control-oriented policy responses, far from alleviating the problems, are exacerbating them.
The long-run solution to the country's chronic food problems lies in the revitalization of industry, which would enable the country to export industrial products and import bulk grains on a commercially sustainable basis—just as its neighbors South Korea, Japan, and China do. But in the short run the country needs food and fertilizer. Without a timely infusion of these, this summer's harvest will be down, setting the stage for renewed distress in 2009.
The Empty Bowl
The roots of this emergency lie in a series of reckless decisions the North Korean government made from 2005 onwards. After several improved harvests and the receipt of generous amounts of aid (primarily from South Korea and China), the government banned private trade in grain. The result was to criminalize the primary mechanism through which most North Korean families secured food, and that grain supplies in rural areas were confiscated. The authorities then compounded their disruption of both the consumer and producer sides of the food economy by shutting down the operations of the World Food Program (WFP) and other relief agencies in the hinterland—the equivalent of removing the canary from the mineshaft.
More provocative decisions (North Korea's missile and nuclear tests of 2006, which led South Korea to halt its fertilizer donations) and bad luck (adverse weather conditions) made a bad situation worse. In these circumstances, local grain production fell, aid dried up, and with global food prices rising the regime's capacity to import grain on commercial terms withered.
There is real uncertainty about the current extent of distress. At the most fundamental level, even the population statistics are opaque (estimates range from 20 million to 24 million), rendering all estimates of human demand suspect. There is also reason to believe that the Food & Agriculture Organization (FAO) and the WFP have overestimated per-capita grain consumption by around 20 percent. On the supply side, the FAO is diplomatically constrained to acknowledge North Korea's politicized official figures on grain output, which tend to overstate harvests when times are good and underplay them when the regime wants aid, as illustrated by its downward revision of the most recent harvest by a whopping 25 percent.
The result is that year after year, the United Nations agencies have produced estimates of large grain shortfalls, which taken at face value would imply that a famine was already well underway (see figure 1). The effect of unwittingly crying wolf has been to lull the world community to the emerging crisis. But now the wolf really is at the door: According to our preferred estimate, North Korea's comfort margin between grain needs and available supply is down to 100,000 metric tons of grain.
The United States is seeking agreement on the 500,000 metric tons aid package—which would also be a quid pro quo on its nuclear deal with the government in Pyongyang. But American rules governing food aid require that it be American grain, arriving in American ships, and that there be improved monitoring of food-delivery. Even if an agreement with the North Koreans were reached tomorrow—and negotiations have hit obstacles—it would be months before this aid arrived in North Korea.
Bad Times, Good Neighbors
As a consequence, the response of three of Pyongyang's neighbors that are capable of delivering supplies quickly—South Korea, China, and Japan—is now pivotal.
In the short run, the single most important action would be for China to remove its export taxes and quotas on food shipped to North Korea, so that the market could begin functioning again.
In South Korea, the government's plan to make large-scale development assistance conditional on North Korean behavior is fully warranted. But after some initial ambiguity, Seoul has reaffirmed its commitment to providing humanitarian aid without strings attached. Pyongyang reacted to this generosity with a fusillade of personalized invective against the new South Korean president, Lee Myung-bak, and turned instead to China for support.
The current state of political relations with the North notwithstanding, South Korea should remain calm and expand its use of the UN system as a conduit for renewed assistance. The government should also use the network of NGOs which has evolved over the last decade as a face-saving channel for official relief.
Japan is an even more difficult case, since Tokyo's relations with Pyongyang remain mired in the issue of North Korean abductions of Japanese citizens in the 1970s and 1980s. Yet Japan could use its 1.5 million metric tons of imported rice for relief if the United States indicates that it will not enforce a bilateral treaty restricting its use. Indeed, the United States could encourage such a request to offset US donations, which again simply will not arrive in time.
The current and forthcoming crisis, serious as it is, is unlikely to acquire the magnitude of the 1990s famine (see Stephan Haggard & Marcus Noland, Famine in North Korea: Markets, Aid and Reform [Columbia University Press, 2007]). The North Korean economy, even in its constrained and hamstrung state, is better able to respond than it was then; the global community is more aware now of the country's vulnerability; and it may be (though there is an element of hope here) that the leadership in Pyongyang is more sensitive than before to the plight of the citizenry. The likelihood is that the regime will weather the challenge of famine politically by intensifying repression, scrambling for foreign assistance, and guaranteeing supplies to core supporters in the army, the security apparatus, and the ruling party—even at the cost of a further erosion of internal support.
But to minimize distress and death, North Korea's neighbors and the international community need to act firmly and quickly. Even if they do, their initiatives will amount only to a bandage, and will be hostage to progress on political issues. But North Koreans cannot wait. They need food and fertilizer to avoid crisis turning into catastrophe in 2008–09.
Figure 1 North Korea grain balance
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