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Famine and Reform in North Korea* Famine and Reform in North Korea Famine and Reform in North Korea* Marcus Noland Abstract Institute for International North Korea has been in a food emergency for more than a dec- Economics 1750 Massachusetts Avenue ade and in the 1990s experienced a famine that may have claimed Downloaded from http://direct.mit.edu/asep/article-pdf/3/2/1/1688365/1535351044193411.pdf by guest on 30 September 2021 N.W. one million lives. The crisis is distinguished by its protracted na- Washington, DC 20036 USA ture, and although conditions have eased somewhat in recent [email protected] years, the situation remains precarious, and the country could lapse back into famine. This paper reviews the origins of the North Korean food crisis, the impact of the 1990s famine, and the prospects for resolution of the emergency in light of economic re- forms initiated in 2002 and the subsequent diplomatic confronta- tion over the country’s nuclear weapons program. 1. Introduction The Democratic People’s Republic of Korea (DPRK), or North Korea, has been experiencing an ongoing food crisis for more than a decade. A famine in the late 1990s resulted in deaths of an estimated 600,000 to 1 million people out of a prefamine population of roughly 22 million.1 Since then, a combination of humanitarian food aid and development assistance has ameliorated the situation somewhat, but * Nick Eberstadt, Gordon Flake, Aidan Foster-Carter, Ruediger Frank, Mark Manyin, Bill Newcombe, and Scott Snyder pro- vided helpful comments on an earlier draft of this paper, as did the participants at seminars at Harvard University and the Asian Development Bank, the conference “Famine: Interdisci- plinary Perspectives from the Past and the Present,” sponsored by the European Science Foundation at Fondation des Treilles, and the meeting of the Asian Economic Panel held on 9–10 October 2003 in Seoul, South Korea. Scott Holladay and Paul Karner provided research assistance. 1 The issue of excess deaths is analyzed in more detail in section 5. Noland (2000) summarizes contemporaneous estimates of ex- cess deaths, which range from 220,000 to 3.5 million. On the difªculty of assessing North Korea’s population statistics, see Eberstadt and Banister (1992) and Eberstadt (2000). Asian Economic Papers 3:2 © 2005 Institute for International Economics Famine and Reform in North Korea according to ofªcials of the World Food Programme (WFP) and other observers, as of June 2003 the country was on the precipice of yet another famine. By standard statistical measures, North Korea is the world’s most militarized soci- ety, and its domestic propaganda incessantly proclaims the virtues of the country’s “military-ªrst” politics.2 Internally, all aspects of North Korean society are suffused with politics; externally, politics thoroughly permeates not only the country’s diplo- matic ties but also its economic relations. If there were comparable standards for the measurement of “politicization,” North Korea would likely rank ªrst in this cate- Downloaded from http://direct.mit.edu/asep/article-pdf/3/2/1/1688365/1535351044193411.pdf by guest on 30 September 2021 gory as well. Given the extreme preference of the current regime in North Korea for guns over butter, the North Korean economy does not produce enough output to sustain its population, and population maintenance is aid-dependent. Yet the October 2002 revelation of a nuclear weapons program based on highly enriched uranium (in ad- dition to a plutonium-based program acknowledged a decade earlier), undertaken in contravention of several international agreements, and North Korea’s subsequent withdrawal from the Nuclear Nonproliferation Treaty have put continued interna- tional assistance in doubt. The food crisis is further complicated by internal economic policy changes initiated by the North Korean government in mid-2002. These reforms include marketization of the economy, a large increase in the overall price level, the promotion of special economic zones, and diplomatic overtures that signal willingness to normalize rela- tions with Japan and ultimately aim to secure billions of dollars considered “post- colonial claims.” These initiatives are expected to affect the availability of food on both the supply and demand sides. On the supply side, the government hopes that the procurement price increases it has initiated will spur the production of addi- tional supply. Because North Korean agriculture is highly input-intensive (e.g., it makes extensive use of chemical fertilizers and insecticides and relies heavily on electrically powered irrigation systems), the ultimate impact of the reforms on agri- cultural yields could be strongly inºuenced by economic changes in the industrial sector. On the demand side, the government may be trying to ensure survival ra- tions by maintaining the public distribution system (PDS), the rationing system by 2 During its war with Ethiopia, the percentage of Eritrea’s population under arms and its mili- tary expenditure as a share of GDP exceeded the comparable ªgures for North Korea, but with the cessation of hostilities in the Horn of Africa, North Korea has reasserted its historic primacy on these measures. See www.kcna.co.jp for a sample of North Korean domestic dis- course. 2 Asian Economic Papers Famine and Reform in North Korea which most North Koreans historically obtained food, and by allowing citizens to purchase food in the market to supplement these rations. The increase in agricultural procurement prices was presumably undertaken to in- crease the amount of food entering the PDS. However, PDS prices have remained largely unchanged since 1 July 2002, and market prices have increased signiªcantly, so whatever the motivation for the price increases, it is unclear whether the policy is having its intended effect. Given the growing inequality in the distribution of income and wealth within North Korea, which could accentuate differences in Downloaded from http://direct.mit.edu/asep/article-pdf/3/2/1/1688365/1535351044193411.pdf by guest on 30 September 2021 access to food and exacerbate the already highly stressed nature of North Korean society, it would not be surprising to observe increases in mortality rates in the future. 2. Historical background Prior to the partition of the Korean peninsula at the end of the Second World War, most Korean industries were located in the north; the south was the country’s breadbasket. In the period immediately following the Second World War and the ex- pulsion of Japanese colonialists, the Korean peninsula was partitioned into zones of Soviet and American military occupation in the north and south, respectively. In the Soviet-occupied zone, land belonging to Korean landlords and Japanese colonialists was seized and redistributed to the peasantry during 1945–46. This land reform was accompanied by a dramatic fall in agricultural output, and urban areas experienced food shortages. The new socialist administration prohibited private trade in food and conducted compulsory grain seizures in the rural areas during the winter of 1945–46. In 1950, North Korea invaded South Korea. Armies on both sides traversed nearly the entire length of the peninsula twice and destroyed most of the physical capital stock. Considerable population movement occurred as well, mostly from the north to the south. It is impossible to ascertain with any degree of certainty the economic capacities of the two countries at the end of the hostilities in 1952. Under Soviet tute- lage, North Korea set about establishing a thoroughly orthodox centrally planned economy, remarkable only in the degree to which markets were suppressed. House- holds obtained food and other items through a rationing system calibrated on the age and occupation of the individuals in the household. In 1955, founding leader Kim Il-sung proclaimed juche (self-reliance) to be the national ideology. Under his leadership, North Korea developed into the world’s most autarkic economy: it never joined the Council of Mutual Economic Assistance (COMECON) and even went so 3 Asian Economic Papers Famine and Reform in North Korea far as to time its central plans out of phase with those of allied socialist states to frustrate linkages to other economies. Following the Korean War, North Korea’s agriculture was collectivized, quantitative planning in production was introduced, state marketing and distribution of grain were established, and private production and trade were prohibited. Two types of farms were established legally: cooperatives and state farms, with the latter consid- ered ideologically more advanced. The country experienced food shortages in 1954– 55 as these changes were undertaken. Beginning in 1959, motivated by military se- Downloaded from http://direct.mit.edu/asep/article-pdf/3/2/1/1688365/1535351044193411.pdf by guest on 30 September 2021 curity concerns, food security was pursued through self-sufªciency, not only at the national level, but also at the provincial and even the county levels (Lee 2000; S. Lee 2003). Collectivization was accompanied by an increase in irrigation and the use of indus- trial inputs such as chemical fertilizers, pesticides, tractors, and electrically operated irrigation systems. During the 1960s, the country pursued the “four moderniza- tions” of “mechanization, electriªcation, irrigation, and chemicalization,” eventually establishing what might have been at the time the world’s most input-intensive ag- ricultural system, exceeding even that of Japan. The authorities altered previous planting patterns: speciªcally, traditional food crops such as tubers, millet, and pota- toes were replaced with maize. Yields were increased but were highly susceptible to declines in inputs (e.g., shortages of fertilizer, pesticides, or electricity). In response to food shortages in 1970–73, the degree of centralization of North Ko- rea’s agricultural planning was intensiªed, and local authorities were increasingly marginalized. Food production was subject to the same input-output standardiza- tion as any other economic activity, and instructions were speciªed down to the level of fertilizer usage by individual cooperative farm households.
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