When North Korean agitprop backfires: A film about a peasant uprising is sowing dangerous ideas

What passes for a feel-good story in one of the world’s bleakest corners? Evidence that the seeds of class warfare are sprouting within a state that has fooled so many gullible leftists into believing that it’s a paradise of socialism. The Daily NK reports that an old agitprop film is inspiring exactly the kind of revolutionary consciousness that Kim Jong-un sees in his cognac-sodden nightmares. The film, “Im Kkoek Jung,” reminds North Koreans that their society has become the very thing the state’s propaganda once told them to rise against, if only they could arm themselves and organize.

North Korean residents are reflecting on inequality in their society for which the regime [is] responsible, thanks to the renewed popularity of a historical movie called Im Kkeok Jung. The movie depicts a 1559 peasant rebellion by a band of thieves who set up camp in an egalitarian mountain village called Chongsokgol.

Although ordinary residents struggle through the annual food shortages associated with the ‘agricultural hardship period,’ North Korea’s political cadres live in luxury apartments packed with South Korean televisions and other expensive items. The situation is in stark contrast to the fictional town of Chongsokgol, where people are shown living in equality regardless of their social status or family history. The comparison between the ideal society presented in Im Kkeok Jung and the very different reality that ordinary North Koreans face is stirring resentment towards North Korea’s ruling elite. [Daily NK]

How could it be otherwise in Kim Jong-un’s North Korea, where 70 percent of the people go hungry and a few | live in | Bacchanalian | luxury, and where class divisions are mostly fixed and hereditary?

“There are many families in the surrounding area that lack food security,” said an inside source from Ryanggang Province, located in the country’s northwest region along the border with China, during a telephone call with Daily NK on March 31. “I think the number is over 60%. The problem is particularly severe in Kimjongsuk County and Samsu County. It’s becoming common for residents to quip to one another, ‘I want to find Chongsokgol and live there.’”

“People are weary and exhausted from the struggle of everyday life,” she added. “They’re saying that it would be better to live together with other poor people in an equal society like the one depicted in Im Kkeok Jung.”

Im Kkeok Jung is a five-part movie created by the Korean Film Studio and directed by Jang Yong Bok. In the film, the character Im Kkeok Jung defies aristocratic bureaucrats and sets out to abolish the oppressive social ranking system. To do so, he sets up camp at Chongsokgol. The mountainside village’s name has become synonymous with egalitarianism and is presented as a utopia. [Daily NK]

You can watch the entire film on YouTube — complete with English subtitles — although production-wise, it’s not exactly “Descendants of the Sun.” Just imagine if South Korea’s film industry did a remake of this. No, forget I said that. South Korea’s right is too binary and paranoid to see the potential of it, and most of South Korea’s film industry would rather lionize Kim Jong-un than dethrone him.

“When people are alone with their family members, it has become a regular occurrence to ridicule Kim Jong Un. People call him immature, citing his lack of personal life experience as the reason for his inability to understand the needs of the common person. Residents ask, ‘How can any political leader succeed when they enter politics at such a young age?’” a source in North Hamgyong Province said.

“These days, residents complain directly to party cadres, saying, ‘Are you trying to starve us all to death?’ All the cadres can do is grin sheepishly in response.”

“Residents are doing everything within their power to simply survive and try to better their lives, but nothing has meaningfully improved,” said an additional Ryanggang-based source. “Looking at the lifestyles of the cadres today, they remark that, ‘Life today is exactly the same as it was during the time of Im Kkeok Jung.’ Quite a few people regularly talk about going to extreme lengths to live in a place like Chongsokgol.” [Daily NK]

Amid this widespread hunger, it isn’t lost among North Korea’s poor that the state has higher priorities than feeding them.

“There are an increasing number of people who are suffering from malnutrition in agricultural regions such as Pochon County, Kapsan County, and Samsoo County. People in these rural areas resent the fact that there aren’t enough potatoes to feed the people, yet the government is obsessed with missiles. What difference in our lives will launching a missile make?” a source in Ryanggang Province told Daily NK on March 21.

“Even ordinary people understand that the price of a missile is enough to feed the whole population for several months. So every time the regime conducts a nuclear test or missile launch, many become infuriated at the waste of money, equivalent to hundreds of thousands of tons of food.”

“The residents were especially outraged to see Kim Jong Un beaming while watching the test (on March 18). He seems to be satisfied even though he spent money that could have been used to save starving people,” noted a separate source in Ryanggang Province. [Daily NK]

Even Kim Jong-un himself may have implicitly acknowledged this discontent. But if inequality is the greatest threat to the stability of the regime, corruption may be a close second. Historically, it has always been individual injustices that have inflamed the underprivileged. Here is one such story that is “brewing discontent among locals regarding the pervasive injustice in North Korean society,” but could have inflamed an entire province — or the entire nation — if North Koreans could have texted it to each other:

“At the end of October last year, Song Ju, a third-year student at Kim Jong Suk Senior High School, stabbed his classmate to death following a quarrel over a female. He was sentenced to one year’s detention at a re-education camp,” a source in Ryanggang Province told Daily NK on March 27.

“However, he was released earlier this month, after just four months in the camp. People are saying that someone must have pulled strings behind the scenes.”

The student is said to belong to a well-known and powerful family in Kim Jong Suk County, Ryanggang Province. His father is a director of the county forest management center, while his mother is head of a district office with influence over broad issues in the region. Using their positions, both parents have reportedly bribed law enforcement agencies, including the provincial Ministry of State Security unit, and applied pressure to shorten their son’s prison term. [Daily NK]

Every now and then, discontent over these injustices breaks out into acts of resistance against the state.

A North Korean man in his 40s angered by the human rights violations he was subjected to some weeks ago during an investigation has attacked the officer responsible and evaded capture.

“The incident took place at a Ministry of People’s Security (MPS) unit in Pyongsong, South Pyongan Province on March 16. Soon after, all MPS units in the region were put on a state of emergency,” a source in South Pyongan told Daily NK on March 22.

The MPS official was badly injured and is currently in a hospital in Pyongsong. The authorities are reportedly considering relieving him of duty not only due to the attack but also because he let the suspect escape.

The Ministry of People’s Security has distributed photos of the fugitive to security departments in the border areas under the assumption that he may attempt to defect. Thorough restrictions have also been placed on all residents who are moving around at nighttime, the source added. [Daily NK]

As is usually the case, the grievance that led to the act of resistance was economic — the struggle by the lower classes to survive in a society that refuses to provide for them.

Offering details of the case, he explained that the suspect was accused of economic crimes and had been under investigation for a month by the local MPS unit. During the preliminary trial, the prosecutor reportedly hurled invective like, “You should be grateful you can still eat,” and, “Dishonest people like you deserve to die.”

“Pyongsong residents are siding squarely with the victim and assuming that the abuse must have been severe for an innocent man to attack an officer. Everyone is hoping he escapes,” he said. [Daily NK]

The report lends further support to my speculation that the purge of Minister of State Security Kim Won-hong, and of the internal security agency he once led, is a reaction to the regime’s fears that the MSS’s corruption and brutality are viewed in Pyongyang as a threat to regime stability. It knows the MSS are hated, so it’s making scapegoats of them. But if the state can’t pay the MSS cadres a decent wage or earn their loyalty by other means, a purge risks alienating the very people it relies on to keep everyone else in terror.

For now, however, those acts of resistance remain localized and easily contained. It will remain that way as long as North Koreans believe that challenging the state would be suicidal. That, in turn, will not change until North Koreans can talk, conspire, and organize with one another in confidence, but when they can, revolutionary | things | happen.

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North Korean security forces now asking politely for protection money

Yet more reports are validating that, since the recent ouster of State Security Minister Kim Won-hong for “human rights violations” and other reasons, something has changed (at least for now) in the way North Korea’s internal security forces are operating:

Following orders from Kim Jong Un for the Ministry of State Security (MSS) to refrain from violating human rights, its personnel have begun to shy away from their characteristic extortionist behavior during their interactions with residents. This appears to be an attempt to balance their effectiveness in garnering bribes from residents while avoiding punishment from above.

A source in Ryanggang Province told Daily NK on March 14 that MSS officials have eased up on heavy-handed behavior, most noticeably amongst those with regional areas under their jurisdiction.

A source in North Hamgyong Province added, “Even until early this year, security agents used to threaten people unless they paid bribes, but these incidents have recently been in decline. The change seems to have been influenced by Kim Jong Un’s instructions, but it is unclear how long will it continue.” [Daily NK]

The reports suggest several interesting things. First, MSS officers aren’t being paid enough to support themselves without shaking down citizens. That means the pursuit and blocking of the revenue that supports the MSS can further damage North Korea’s internal control and further strain relations between the state and its subjects.

Second, the state is more afraid of the people than many of us had assumed. Why else would it order the MSS to stop shaking citizens down? Now, citizens who are used to being extorted are “surprised to see MSS officials pleading with them for money instead of threatening them like they used to.” The Daily NK‘s sources don’t think this change will last, but it’s still significant that they think this:

“Recent measures against the MSS, including the purge of Kim Won Hong and the execution of high-ranking officials, are just political posturing to appease the residents. The MSS is likely to have its power restored soon and the agents will return to their old ways again,” he said.

That validates my first theory of Kim Won-hong as scapegoat, a la Yezhov. Another theory, sourced to a think tank run by South Korea’s National Intelligence Service, is that Kim was done in by his rivalry with Choe Ryong-hae, who sabotaged him to get revenge for his own punishment by being sent to the fields for a few months.

I’m convinced that we’ve underestimated the power of talking to the North Korean people about human rights. No wonder the regime is so furious when we do it. We underestimate the regime’s fear of its poorest classes. We also underestimate the connection between money and internal control in North Korea. The right strategy isn’t to talk about human rights or target the regime with sanctions. It’s both strategies pursued in coordination. These surprising reports give us small hope that we can present Pyongyang’s intrigue-riven elites with a stark choice: to change, or to perish.

Our most urgent diplomatic priority this year will be to prevent Moon Jae-in from relieving Pyongyang of that choice, using any leverage at our disposal.

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Class struggle in North Korea

“The history of all hitherto existing society is the history of class struggles. Freeman and slave, patrician and plebeian, lord and serf, guildmaster and journeyman, in a word, oppressor and oppressed, stood in constant opposition to one another, carried on an uninterrupted, now hidden, now open fight, that each time ended, either in the revolutionary reconstitution of society at large, or in the common ruin of the contending classes.” 

– Karl Marx, The Communist Manifesto

And yet, no place is quite so perfect a laboratory for Marx’s ideas of class struggle and alienation as the state that some neo-Marxists claim as a paradise of socialism, even as others wishfully declare that capitalism is breaking out there. Both views are wrong, of course. North Korea hasn’t been socialist for a long time. Its officials are accomplished profiteers and money launderers. It practices economic totalitarianism because that serves its greater goal of political totalitarianism. One form of economic totalitarianism is as good as the next:

Recent reports suggest that the consumption gap is widening in Pyongyang, increasing tension between North Korean residents and the regime. According to sources inside the country, the newly affluent middle class, known as the donju, are fueling the trend by providing premium high quality products to wealthy customers while offering sub-standard items to ordinary citizens.

“Pyongyang, the heart of the revolution, is becoming a place of severe income disparity – even more so than in a capitalist state. This is because the privileged classes are in control of the Pyongyang Department Store [No.1], the General Markets, and the trading infrastructure,” a source in South Pyongan Province told Daily NK on February 27. [Daily NK]

What the report really describes is state capitalism, or crony capitalism, in which most Pyongyang residents rely for their needs on markets that are rigged by a predatory oligarchy that profits from its political connections, not its merits or talents. Party officials, their wives, and their relatives have used those connections to seize control of state stores, markets, and the trade in the goods that fill them. They have a de facto monopoly that excludes all but the highest rungs of North Korea’s political caste system:
What this has resulted in is a situation in which all the prosperous individuals are either direct relatives of officials or those who donate significant loyalty funds to government departments. Having absolute power over trading infrastructure, the donju have taken control of the market in Pyongyang with the authority to import foreign goods freely, and price them however they wish.
Any poli-sci professor at Berkeley could have told you the inevitable outcome of that:
As a result, many residents are feeling alienated from the benefits of marketization, and complaints against the regime are rising. In addition, criticisms are increasingly targeting the wealthy class who are openly squandering their money while maintaining their wealth through the political control of enterprise assets.
Consequently, the report says, “the majority of” Pyongyang residents have come to detest the donju and their conspicuous consumption.
Some of the more opinionated residents are saying that, ‘They (the cadres and donju) should be bumped off first if a war breaks out,'” a source in Pyongyang added.
Marx may or may not have said that (though Douglas Adams said something very much like it). Incidentally, North Korean defectors have told me that “when the war comes” is code talk for revolution. This is the natural result of Kim Jong-un’s policy of enriching the party elites while keeping everyone else just hungry enough to control them efficiently and enslave them profitably. Is there some law against the CIA sowing Marxist agitprop? It is malpractice that our own government’s broadcasts and information operations fail to exploit the timeless and universal appeal of class struggle, given the legitimacy of its basis in the capital of such a dangerous enemy.

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Preparations for North Korea’s party congress spur anger, resistance, and dissent

Over the last year, this site has closely tracked growing signs that North Korea’s elites are discontented with Kim Jong-un’s leadership and fearful of being purged, and of falling morale and discipline in the North Korean military. More recently, we’ve seen extraordinary outbreaks of dissent among North Korea’s overseas workers, including the group defection of 13 restaurant workers and a reported mutiny by 100 workers in Kuwait.

Whether these incidents reflect popular sentiment inside North Korea itself is a harder question to answer. Some remarkable reports of dissent and resistance have emerged from North Korea recently, but Kim Jong-un’s crackdown on the borders means that the reports take longer to emerge, and they’re more difficult to verify. But for those who are watching for them, the signs are there.

[Radio Free Asia]

The confrontation is so reminiscent of one shown in the 2014 PBS Frontline documentary, “The Secret State of North Korea,”  that I had to compare the two clips to be sure they weren’t the same. Of course, there was nothing overtly political about this incident. Similarly, a reported bank robbery in the city of Chongjin may not have been politically motivated, either, but it would represent an extraordinary act of lawlessness for North Korea. It suggests that beyond the limits of Pyongyang, North Korea could become what John Lee recently described as “a failed state.”

Other incidents have been expressly political. Radio Free Asia reports that in the northeastern city of Chongjin, some brave soul stole the North Korean flag from the flagpole in front of city hall overnight. On the night of Kim Il-sung’s birthday.

In late March, the authorities found anti-regime leaflets and graffiti in public places in Pyongsong, Hamhung, Chongjin, and even Pyongyang.

But the case that has received the most attention occurred at a train station in the town of Posong in Samsu county, Yanggang province, through which express trains to Pyongyang pass. [….]

“The authorities are trying to hunt down suspects whose handwriting matches that of the writing,” he told RFA’s Korean Service. “The leaflet was reportedly plastered right below the portrait of [former leader] Kim Il Sung on a wall.” [….]

“The leaflet found last New Year’s Day said, ‘Kim Jong Un is a son of b**** in Chinese ink,” the source said. “There were so many people from across the country mobilized at Posong station on Jan. 1st for the New Year’s Day celebrations that the news may have spread nationwide.” [Radio Free Asia]

News of the incident “spread like wildfire” at a political rally whose purpose (ironically, if predictably) was to idolize His Porcine Majesty. The Daily NK also publishes a similar report of anti-regime graffiti at Hyesan, in Ryanggang Province, criticizing the party congress. The Daily NK claims to have corroboration from multiple sources for the report. 

The locations of these incidents are too far apart to be the work of one individual, and the consistency of the reports provides a degree of mutual corroboration. Although the possibility exists that this was the coordinated work of an organization, it’s more likely that these are uncoordinated and spontaneous outbreaks of dissent across North Korea. Not for the first time, apparently:

“Last October, people across the country defaced posters glorifying North Korea’s ruling Korean Workers’ Party to show their resentment against the burdens the government imposed upon them in preparation for celebrations marking the 70th anniversary of the party’s founding, RFA reported. [Radio Free Asia]

This party congress was supposed to be an occasion for deifying His Corpulency, reinforcing loyalty to the state, and consolidating power by shifting it to a younger generation of officials who are ostensibly loyal to Kim Jong-un. Instead, something closer to the opposite appears to have happened. The younger generation tends to be more loyal to its financial interests than to the old ideology. The people have been exhausted by mass mobilizationsharangued with dull lectures, and stultified by slogans they don’t believe anymore. They’re tired of being told that everything will be fine if they just work harder and trust in Kim Jong-un. The causes of their hardships are all too clear — confiscatory “loyaltypayments, restrictions on market activities, and crackdowns on smuggling from China and remittances from South Korea. Most of North Korea’s poor depend on one or more of these things for their survival.

“We haven’t been able to sell things properly because of the mandate forcing every resident to take part in mobilization and ‘uphold the Party with loyal beads of sweat to build a strong nation’ in relation to the 70 day battle,” a source from Ryanggang Province told Daily NK on March 6. “These days, MPS [Ministry of People’s Security, or North Korea’s police force] agents are on patrol all the time to crack down on street vendors.” [Daily NK]

“[W]orkers at all state-run enterprises must now attend daily ‘loyalty meetings’ starting at 5a.m.,” which is apparently unprecedented, even for (this part of) North Korea.

“It’s really just all about the regime getting people to start working sooner,” the source asserted. “They’re using the ‘loyalty meetings’ as an excuse to get them to the factories earlier in the day. Although the ’70-day struggle’ is undoubtedly a big part of it, it is also plausible that the authorities are trying to distract everyone from the looming specter of sanctions, keeping them so busy that they don’t have time to think about it.”

While the exact rationale behind the early hour is open to question, the collective reaction it has elicited from workers is anything but. “At first you’ve got to go in [at that time] because there’s no avoiding it,” he said, conveying sentiments shared with him by factory workers.

“Show me someone who would maintain that level of devotion otherwise! Fear of punishment is the only thing keeping anyone in line–not bona fide loyalty [to the regime].” [Daily NK]

This may increase production temporarily, but soon enough, people become exhausted, and production will drop off again. Some of the work is simply make-work: “People … have been mobilized to work around the clock in construction and clean-up of the areas around twin statues and monuments to Kim Jong Il and Kim Il Sung in preparation for the Workers’ Party Congress.” Workers and students have been ordered to collect scrap iron, and some are meeting their quotas by stealing, or by looting and stripping factories. The factories, in turn, have hired ex-soldiers as private security guards, who brutally beat any looters they catch.

Those who can afford to buy their way out of the extra labor; those who can’t must work longer hours. Wage payments are unreliable, and “the people are coerced to deposit 1,000 won to banks every month during the period of the 70 days battle.” State banks reportedly charge 50% commissions for withdrawals, which means that “deposits” are effectively confiscations.

For a regime that talks so much about the loyalty of its people, Pyongyang is watching them as if it’s mortally terrified of them. It has required “all North Korean citizens near the North Korea-Chinese border to carry ID on them at all times,” and stopped citizens for random checks. It is reinvestigating the backgrounds of its citizens for signs of disloyalty and keeping a close watch on those who fall under suspicion. It is destroying homes near the border with China as a countermeasure against defections. It has restricted movement in and out of Pyongyang and stepped up surveillance in residential neighborhoods, hotels, and public places.

These mobilizations, confiscations, and restrictions are partially about money, of course, but they’re also about control. This regime knows that if it can’t keep its subjects happy, the next-best way to control them is to keep them tired and busy. North Korea’s government lacks the competence to provide such essential services as sanitation, medicine, education, irrigation, public health, roads, a fresh water system, public order, and baths; and it certainly can’t bring peace. Now, even its vaunted propaganda is failing. Its last remaining competency — the one on which its survival may depend — is ensuring that those who seethe at it are kept too tired, too busy, too afraid, and too isolated to communicate, combine, or organize against it.

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Pyongyang’s sanctions are the ones that hurt the North Korean people the most.

Last month, I wrote about one slightly surprising consequence of sanctions against North Korea — sanctions have prevented Kim Jong-un from selling off and exporting resources needed by the North Korean people, which has flooded North Korean markets with cheap coal and seafood.

Now, we’re starting to see something like the converse of this, in which restrictions on what North Korea’s donju and purchasing agents can import is forcing them to find other ways to kick up steep “loyalty payments” to their overlords in Pyongyang. What’s a donju to do? Find something to send back to North Korea that isn’t covered by sanctions — like apples. The result has been to flood North Korean markets with cheap apples during North Korea’s lean season — called the “barley hump” — when winter food stocks have run out and home-grown crops haven’t been harvested yet.

For this reason, many trading companies have increased their import of daily goods and food products, neither of which are subject to the harsh round of unilateral and multilateral sanctions imposed on North Korea in early March in response to its fourth nuclear test and rocket launch. In particular, fruit such as apples are not included on the list of sanctioned items, so these trading companies can reliably earn foreign currency by buying and selling them. [Daily NK]

Making more food available during the lean season could also have a secondary and beneficial effect, by reducing the incidence of “pre-harvesting” of North Korean crops, which reduces the aggregate food supply.

“Right now the market is so flooded with Chinese apples that vendors are even selling one apiece to customers who don’t have a lot of money,” he said. “It seems like imported fruits are going to dominate the markets until North Korea’s first fruits of the year become available around July.” [Daily NK]

Radio Free Asia even publishes this image of apple boxes stacked up at the customs checkpoint at Dandong.

apples

[via AFP]

It also informs us that there might be more than apples in some of those boxes. 

“It has become impossible to send so-called ‘apple rice’ to North Korea now,” said a trader in Dandong, a border town in northeastern China, in a reference to rice that China sends to North Korea packed in apple boxes rather than regular rice sacks.

But in this instance the source used “apple rice” to describe goods shipped between China and North Korea that are falsely identified on their outer packaging to conceal their true contents, such as materials used to manufacture narcotics in North Korea.

The fact that Chinese traders are no longer able to send “apple rice” to North Korea means that Chinese customs authorities are performing more thorough inspections at the border, the source said.

If such goods are discovered during the inspections, the traders will be fined, and all their freight will be confiscated, he said.

“The trading companies whose ‘apple rice’ is found through random inspections will be in big trouble and have to pay a large fine,” said the source, adding that the customs inspections process has become stricter for goods entering China from North Korea. [RFA]

Why do traders hide rice in apple boxes? Beats me, but it’s not because of sanctions; maybe China has a rule against exporting rice. Either way, increased cargo inspections at the land borders compared to last month are good news, because Pyongyang has taken advantage of lax inspections to smuggle bulk cash and other contraband across the border. They’re also bad news, because smuggling brings food and information into North Korea.

Overall, however, it’s good news that the trade in food and consumer trade continues, because it means that sanctions’ impact on the North Korean people is being minimized, even if it can’t be eliminated completely. The critics who were (and still are) eager to complain that sanctions would starve poor North Koreans won’t find much evidence to support support their arguments. Despite this being the lean season, food prices have remained stable since sanctions were imposed. Motor fuel prices have risen in Pyongyang, although the reasons for this aren’t clear. U.N. sanctions ban the export of jet fuel to North Korea, but they don’t impose an oil embargo. It may be that North Koreans are hoarding, and it may be that the regime itself is, perhaps for political parades or military needs. Fuel prices do have the potential to affect food prices indirectly, so this bears close watching.

The only report I’ve seen of food shortages caused by sanctions is this report, unconfirmed by any others, that a member of the state security forces had begged a defector for money because he’d stopped receiving wages. That’s hardly a tear-jerking tale of woe, if true. Reports that China had cut flour exports to North Korea were likely a measure to alleviate flour shortages in China, and had no evident impact on food prices in North Korea.

But this is not to deny that sanctions have had some adverse impact on workers in state industries targeted by sanctions:

Signs of anxiety have been observed in certain areas near iron and steel mills as well as coal mines following strong international sanctions implemented against North Korea. These come as mine workers seek to secure their finances by moving to smaller and more affordable housing in anticipation of a prolonged period of stalled wages and tighter budgets at home.

“I haven’t seen any panic buying in response to the sanctions, but an increasing number of people living in coal mining areas like Hyesan and Musan are trying to sell their homes,” a source from North Hamgyong Province told Daily NK on Monday. “In one particular neighborhood, there was news that ten households are making efforts to sell their homes.” [Daily NK]

That’s unfortunate, but not that different from what we might see in other countries, including this one, where industries take sudden downturns. Indeed, China had already slowed its imports of North Korean coal a year and a half ago, and the effect of sanctions has been to impose an “abrupt halt on what had already been intermittent” wage payments. There are no reports of malnutrition or starvation among the miners, just reports that they’re retrenching their finances, cutting back on consumer purchases, and hoarding foreign currency. There is also the question of causation. There’s little question that sanctions have indeed hit the North Korean coal and steel industries hard, but it’s also possible that sectoral sanctions on the North Korean coal industry have only accelerated a decline in an industry that had already begun, and was likely to deepen for unrelated structural reasons. Recent reports tell us that China is cutting its own miners’ working hours because of a coal glut, which is probably a function of China’s own economic slowdown.

On the other side of this, critics who don’t understand what sanctions do or are intended to do, like CNN’s Will Ripley, see all evidence of cross-border trade as proof that sanctions aren’t working. But sanctions do not impose a blanket trade embargo on North Korea, for the very reason that the drafters of sanctions want food and other necessities to keep flowing into North Korea. If hunger in North Korea was a deterrent to Kim Jong-un, he wouldn’t be doing so much to enforce it.

The case of the Chinese apples suggests one way in which sanctions can be targeted and enforced to increase North Korea’s aggregate food supply, by shifting state resources back into the markets. Banning North Korea’s food exports might be another way. But those who depend on state industries and wages will invariably continue to lose their paychecks, and will become increasingly dependent on the markets.

The issue of the sanctions’ impact on the people bears close watching over the next year, as nations continue to implement them. On one hand, I think Sokeel Park is right that the (quasi-legal) privatization of agriculture and the food supply means that another famine in North Korea is unlikely. On the other hand, it’s unrealistic to believe that sanctions won’t affect the wrong people at all, in part because the regime will do everything in can to transfer their effects, and already is. This report did a particularly good job of covering this moral dilemma in an honest and balanced way.

But there is no question that times are much harder for North Koreans today than they were a year ago, and it’s not because of sanctions imposed by the U.N. or the U.S., but because of sanctions imposed by the North Korean government on its own people. Specifically, the North Korean government — with substantial help from China — continues to crack down on cross-border trade, smuggling, communications, and remittances, which are essential to the livelihoods of millions of poor North Koreans. It is cracking down on market trading and mobilizing people for exhausting make-work forced labor, denying them the time and the energy to pursue their livelihoods. Those are stories that bear careful watching, too, and which some sanctions critics consistently choose to overlook.

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So far, sanctions are cutting off Pyongyang’s cash while sparing North Korea’s poor.

A month after the President signed the North Korea Sanctions and Policy Enhancement Act and two weeks after the U.N. Security Council approved Resolution 2270, enough information has emerged from North Korea to allow for a preliminary assessment of how the sanctions are affecting those they are meant to target, and those they are meant to spare. 

Sanctions have begun to hit their intended targets. The Daily NK reports that the donju, the well-connected traders who help finance Pyongyang’s priorities through trade with China, initially refused to believe (or plan for) the possibility that China would cooperate with sanctions or cut off the coal trade.

Donju are the fulcrum of North Korea’s coal industry, their massive dollar investments propping up foreign-currency earning enterprises tasked with production and export of a product providing North Korea with much-needed cash from a resource-strapped China.

Now, they’re panicking. Those who are “connected to the export of minerals are reeling after hearing that trucks bound for export have been stopped at the customs office in Sinuiju, North Pyongan Province.” 

“On news that coal exports have come to a halt, donju, the chief actors in the country’s coal distribution industry, have stopped investing,” a source from South Pyongan Province told Daily NK on Tuesday. “Some had been thinking of completely giving up their coal handling and storage facilities, but with the new rumors surfacing about exports resuming in a few months, they’re now mulling over whether to reinvest.  [Daily NK]

The regime is worried that “a prolonged strangle on donju investment could eventually challenge the operation of the mines themselves, and by extension stymie a robust source of funds buttressing the leadership.” This could have long-term consequences for the regime’s financial stability. To maintain the confidence of the donju and keep their money flowing, the regime is spreading rumors that the mineral export ban won’t last for long.

At first, market traders also panicked about the sanctions, fearing that they could lose access to their Chinese sources of merchandise. Some citizens also reacted angrily, according to the Daily NK, saying, ‘‘Those cadres don’t care if us normal people starve,” and, “This is what happens when the authorities pursue useless things [nuclear weapons, missiles] and go around bragging about it.”

All true, and actions by the regime may have been greater immediate causes of hardship. In the build-up to the party congress I prefer to call the Ides of May, the state has cracked down on street stalls, restricted the opening hours for markets, and mobilized people for forced labor (as always, exemptions can be had for a price). At first, some traders hoarded food, but the markets have been resilient, and food prices have stabilized:

“There had been concern we would see fewer goods in the market because of UN sanctions, but in reality, there hasn’t been much difference,” a source from North Pyongan Province told Daily NK in a telephone conversation on Sunday. [….]

Further confirming trends previously reported by Daily NK last week, an additional source in North Hamgyong Province reported yesterday that some people had stocked up food worried about sanctions from the UN, but that this hasn’t led to a violent gyration in prices. “Actually, in some regions, we’re seeing prices of certain products drop,” he noted. [Daily NK]

One of the more interesting effects of the sanctions is that in some ways, they’ve actually increased the supply of fuel and food. Prohibitions on coal exports have diverted more coal into the markets, so despite the cold weather in Korea, coal and firewood are cheap. Incredibly for a country that depends on international food aid and has a massive malnutrition problem, North Korea earns hard currency by exporting food, such as seafood and pine mushrooms. Recently, however, China has halted or sharply curtailed maritime traffic from North Korea, so state-controlled trading companies have dumped their wares on the markets, where ordinary North Koreans can buy them.  

“These days items that were previously hard to find because they were earmarked for export are suddenly emerging at the markets,” a source from North Hamgyong Province told Daily NK on Thursday. “The price haven’t gone down enough yet, so you don’t see too many people actually buying them. But you do see flocks of curious people coming out to the markets to see all the delicacies for sale.”

She added, “High-end marine goods like roe, sea urchin eggs, hairy crab, and jumbo shrimp and produce like pine nuts, bracken, and salted pine mushrooms were once considered to be strictly for export, but now they’re easy to find. The number of such products, referred to as ‘sent back goods,’ at Sunam Market and other markets around Chongjin is growing by the day.”

Additional sources in both North and South Hwanghae Provinces reported the same developments in those regions. [….]

Unlike in the past, when they had to pick out the high-end fisheries goods only to hand over to state foreign-currency earning enterprises, now they can sell the entire load to wholesale merchants.

“People are getting their hopes up, saying they might be able to eat some of the highest quality fish for a cheap price, if the UN sanctions continue to carry weight until the summer,” she explained. “They’re actually welcoming the sanctions now saying that for average people they’re bringing good fortune since the number of goods they can get their hands on are continually on the rise.” [Daily NK]

Why would Chinese ports reject these shipments? As immoral as it may be for a hungry nation to export food, neither the U.S. nor U.N. sanctions prohibit food exports (although perhaps they should). One possible explanation is the fact that North Korea’s seafood trade is controlled by none other than the Reconnaissance General Bureau, or RGB, which was just designated by the U.N. under UNSCR 2270.

The bureau owns dozens of ‘trade vessels’ that it uses for missions and also to secure capital. Along main ports near the West and East Sea, the bureau employs cargo ships like Chong Chon Gang that are tens of thousands of tons in size, or ‘trade vessels’ and ‘reefer ships’ such as Nam San 1, 2, Kum Gang San, Mu Bong 1, 2, Po Thong Gang 11, 12, Seung Ri, and Myong Song, which are 800 to 1,000 tons.

North Korea has given vessels like Po Thong Gang and Mu Bong a monopoly on king crabs, shrimp, and conch fishing. Therefore, they’re able to secure some 1,000 tons annually in marine goods and sell them to individual companies in Japan to buy the necessary reconnaissance equipment.

These bureau vessels also conceal their true origins and engage in trade as regular ships. Especially when they are subject to international sanctions and unable to make port entry, they use tactful tricks such as remaining in international waters, where Chongryon (General Association of Korean Residents in Japan, an entity holding strong ties with Pyongyang) companies will come to their aid in trade.

The reconnaissance bureau operates the ‘Birobong Trading Company’ to earn foreign currency, and under this are needlework and garment factories, as well as marine stations for fishing. Also, it uses the Unit 96 equipment supply station in Pyongyang’s Sonkyo District to buy reconnaissance supplies from overseas and then transfer them to subordinate military installations who will then distribute the equipment to each associated military corps. [Daily NK]

In related news, the Donga Ilbo reports that China has also begun to inspect air cargo to and from North Korea. We’ll see how that affects the flow of jewelry and flat-screen TVs into Pyongyang.

Meanwhile, along the border with China, the source of most of the goods sold in the markets, the Daily NK reports that “[d]espite the sanctions that have already kicked in, products from China are still flowing into North Korea.” The Economist also reports that non-sanctioned trade continues to flow freely in both directions — and spins this as a failure of the sanctions. But neither U.S. nor U.N. sanctions attempt to impose a blanket trade embargo. Their objective is to target the currency reserves and income that sustain the regime — to starve it of cash without starving the ordinary people. That is an important distinction that some reporters don’t seem to understand.

The news bears careful watching, but so far, the sanctions show signs of constricting the cash flows that fund the regime, without starving the poor and underprivileged. As Yonhap quotes me today, much could still go wrong, and it’s much too early to declare victory.* The U.S. and U.N. member states have only begun to implement the sanctions. Effective enforcement will require more investigative resources, long months of rat-catching, and sustained political will. The U.S. and its allies must avoid unforced errors that cause adverse humanitarian impacts and deny the effort the political support it will need. There will be more provocations, tests, and war scares. Those things are the inevitable costs of belatedly confronting a problem, rather than applying palliatives to its symptoms. But the signs we’ve seen since January are the signs I’d expect to see at this stage if my theory was right.

~   ~   ~

* Errata: My reference to section 302 was incorrect. It’s actually section 304. Thanks to the encyclopedic mind of Professor Lee for catching this. Also, “His Corpulency” and “His Porcine Majesty” are registered trademarks of OneFreeKorea.

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Aid agencies struggle to feed hungry kids as N. Korea cuts food imports to 10-year low

Wasn’t it only Groundhog Day when the U.N. released $8 million in emergency aid to “enable life-saving assistance for more than 2.2 million people” in North Korea who are the “most vulnerable and at risk of malnutrition?” Wasn’t it just last month when UNICEF warned that “25,000 children in North Korea require immediate treatment for malnutrition after a drought cut food production by a fifth and the government reduced rations?”

North Korea’s overall food imports from neighboring China fell by a quarter in 2015 when compared the previous year, while cereals and related food products fell to 10-year lows.

NK News analysis comparing monthly figures and data stretching back to 2005 shows that some of the DPRK’s primary food imports fell to levels not seen since the middle of the last decade.

In particular cereals – a trade group which includes rice – continued a steady decline throughout last year until settling at 30 percent of 2014 totals. But at 27,000 tons the figure was the lowest in more than 10 years. [NK News, Leo Byrne]

More helpful context for this problem:

Pyongyang is estimated to have spent a whopping $850 million launching the long-range rocket carrying its Kwangmyongsong-4 satellite Sunday. That amount of money is large enough to feed 20 million North Koreans for a year if it were used to purchase about 2.5 million tons of corn from China.

Beijing must realize that what really harms the good of North Koreans are not the sanctions but the Pyongyang regime’s determination to develop nuclear weapons to ensure its survival. [Editorial, Joongang Daily]

As Professor Lee and I have noted before, Pyongyang values the dead more than the living. Here’s fresh evidence to support that.

A Newfocus internal correspondent reported that OGD ordered the corps headquarters across the state to build new statues of Kim Il-sung and Kim Jung-il, to commemorate the upcoming 7th Congress of the Worker’s Party that is to be held in May 2016. The order is passed down from OGD through Central Committee of the Workers’ Party of Korea, then to the Supreme Command. […]

The correspondent explained, “The initially appointed amount of $600,000 by OGD is snowballing as the order passes down to lower social order. The dollar extortion from the residents is excruciating that the next thing they will take away is the people’s copper utensils”. [New Focus Int’l]

And let’s not forget those ski gondolas. Or this:

Satellite imagery of North Korea’s Nampho port reveals what appears to be a new 50-meter pleasure craft, according to Radio Free Asia (RFA). [….]

The new boat joins a number of other pleasure craft visible on satellite imagery around the DPRK’s coasts. In 2013, an NK News investigation revealed Kim Jong Un’s $7 million yacht, originally manufactured by British company Princess.

UN sanctions prohibit the sale of pleasure craft, cars and other luxury items to North Korea, but patchy implementation often means that prohibited goods can still find their way across the DPRK’s borders. [NK News, Leo Byrne]

When the U.N. issues statements that propagate Pyongyang’s lies — that it lacks the means to import more food, even while it’s importing extravagances and slashing commercial food imports — it perpetuates North Korea’s food crisis. You cannot — cannot, cannot — tell me that for 22 straight years, the droughts and floods that never caused anyone to go hungry in South Korea caused chronic malnutrition in North Korea. The causes of hunger in North Korea are, first, this obscene misallocation of wealth; second, arbitrary food and land confiscations; and third, the failure to institute meaningful agricultural or land reform.

North Koreans aren’t starving because of weather, they’re starving because of deliberate state policies. Those policies are crimes against humanity — what the U.N. Commission of Inquiry called “the inhumane act of knowingly causing prolonged starvation.” The World Food Program and other humanitarian agencies have a duty to address the real causes of this long-term humanitarian crisis by telling the world the truth about them. Until the world demands that Kim Jong-un prioritize his wealth to feed his people, those criminal policies will never change, and most North Koreans will continue to go hungry.

Until the world demands that Kim Jong-un prioritize his wealth to feed his people, those criminal policies will never change, and most North Koreans will continue to go hungry.

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What the U.N.’s new North Korea sanctions resolution should (and should not) do.

Yonhap reports that the U.S. and China have made progress toward an agreement on a draft U.N. Security Council resolution. Although we’ve seen few hints about exactly what sanctions China is willing to sign up for — much less enforce — China is paying lip service to the notion that North Korea must pay a “necessary price” for its behavior. Has Xi Jinping relented in his unprecedented stubbornness, or was it always China’s plan to relent after stalling us, in the hope that with time, the pressure on it would subside? But the pressure has built, not subsided, and the Washington Post‘s Simon Denyer sees signs that this pressure, including the deployment of the THAAD missile defense system, may be causing China to re-think its “paternal benevolence” toward North Korea.

New sanctions legislation may have also played a role, and the State Department is already using the threat of secondary sanctions in its talks with China. This threat has deep political backing in Washington. Everyone with a megaphone is in a foul mood toward China — Congress, presidential candidates, Korea scholars, and the editorial pages. In recent weeks, The Washington Post and The New York Times have both called for the President to use new legislation to apply secondary sanctions to North Korea’s Chinese enablers. Here’s hoping we’ll keep that pressure on until China acts responsibly.

This new leverage will be helpful if it gets us to a new U.N. resolution that includes (and enforces!) useful measures, such as —

  • Above all: requiring member states to report North Korean property, accounts, and transactions to the U.N. Panel of Experts;
  • Shipping sanctions prohibiting the provision of insurance, bunkering, and reflagging services to North Korean ships, thus forcing North Korea to rely on foreign ships for its maritime trade;
  • Designating Air Koryo, thus closing off another avenue for North Korean arms and luxury goods smuggling;
  • Expanding designations to include more North Korean banks, government agencies, and senior officials involved in violating the resolutions; and
  • Prohibiting the use of North Korean forced labor.

Would accountability for North Korea’s crimes against humanity be too much to hope for? Probably, but we should keep demanding it — publicly — until China relents, even if it takes years.

Other ideas in circulation cause me more concern that policymakers could lose the plot and take sanctions too far, or in the wrong direction. For example, the U.N. should not (and almost certainly, would not) indiscriminately cut off all trade between China and North Korea. That would be counterproductive, ineffective, and inhumane. Sanctions are meant to retard and punish proliferation and show Pyongyang that defiance is a losing proposition. They can be targeted to defund the state’s military and security forces, force cadres to turn to corruption and smuggling for a living, and by default, shift North Korea’s internal balance of power from the men with guns to those without. If properly targeted and administered, they might even force reforms.

Freezing the regime’s trading companies, hard currency businesses, and offshore slush funds serves this goal; hunger in the provinces does not. On the contrary, circumstantial evidence has long suggested that the regime uses food as a weapon to control its subjects. After all, by any reasonable reckoning, North Korea has more than enough money to feed all of its people, but has willfully chosen not to. Perhaps Pyongyang sees liberation from the state’s rations as a first step toward economic liberation, intellectual liberation, and eventually, political liberation. Perhaps it is, which is why we should catalyze precisely this progression inside North Korea.

That’s why sanctions should avoid attacking the trade networks that support the jangmadang markets that are feeding most North Koreans. When regime-controlled networks also supply these markets, they should be assigned a secondary priority for sanctions targeting, until non-regime-controlled networks are capable of supplanting them.

Fortunately, I’ve seen no serious proposals to impose a trade blockade on North Korea, despite North Koreans’ fears of one. North Koreans may not understand how modern sanctions work. You can hardly blame them for this when hardly anyone in Washington, Seoul, or Brussels does either. But those who don’t live in Chongjin or Sinuiju and think “sanctions” means trade sanctions are stuck in the 80s.

There are, however, serious proposals circulating in South Korea for a fuel blockade against North Korea. Some in Seoul believe that this would cause North Korea’s collapse, although I’m not sure why that’s so. China is opposed to a total fuel cutoff because of its potential “impact on the ordinary North Korean people.” I haven’t lost sight of the humanitarian benefits of the collapse of this regime, but here, I find myself in rare sympathy with China’s position on the basic principle. After that, things get more complicated.

First, I’m not sure that China is still exporting crude oil to North Korea, or that North Korea still has the capacity to refine it (I’d welcome the opinions of informed readers). China does export refined petroleum products, such as gasoline, diesel, jet fuel, and heavy fuel oil to North Korea, some of which is pilfered from state stocks and sold on the black market. All of these products have different impacts on the North Korean economy. To add further to the confusion, China has sometimes omits fuel exports from its official trade statistics. Marcus Noland smells a rat, and I also suspect that China is disinforming us to take pressure off itself.

Proponents of a fuel blockade should remember that gasoline and diesel don’t just fuel military vehicles; they also fuel vehicles used to plant, grow, and transport food. (Although many North Korean farmers still use oxen to plow fields, or use wood-gas-powered trucks to transport food.) Often, the same vehicles are used for both purposes.

Heavy fuel oil is used to heat homes in cities. In small towns and in the country, people heat their homes with coal, charcoal, and firewood. Cutting off fuel oil would make a lot of people cold, and perhaps reinforce their xenophobic hatred of us, but His Corpulency would never freeze.

There is, however, one category of fuel that China should stop selling to North Korea — jet fuel. Cutting off the supply of jet fuel would ground the North Korean Air Force and deny its pilots the flying hours they need to stay ready. It would ground Air Koryo, which is effectively under military control, as the U.N. Panel of Experts has noted. It would improve enforcement of the arms trade and proliferation bans, because Air Koryo is known to have used its fleet of (mostly Il-76) transports to smuggle weapons and other contraband. It would improve enforcement of the luxury goods ban, because Air Koryo passengers carry prohibited luxury goods from China to North Korea on its flights. Finally, it would deny Pyongyang some of the revenue it earns from tourism.

I don’t yield to anyone in my wish for Götterdämmerung in Pyongyang, but let’s keep a few things in mind. First, we must never back the regime into a position where war becomes an acceptable alternative or a necessary deterrent. Pressure on the regime must be steady and firm, but calibrated such that good-faith negotiation is always a safer alternative for Pyongyang than either war or the status quo. The strategy must be to convince Kim Jong-un — or those around him — that time is not on their side, and that the path to survival lies through a negotiated disarmament, peace, and reunification. If it becomes necessary to prevent war, we may even have to make the painful choice to grant safe passage, or some form of amnesty, to people who have committed horrific crimes against their own people.

Second, hard-liners should remember that the same soft-liners who never raised a peep as Pyongyang sanctioned and starved its own people are always waiting to pounce and blame them for starving North Korean babies. It’s unfair and disingenuous, but the world has never been fair. No policy can endure for long without the support of the political mainstream.

More fundamentally, we can’t solve the North Korea crisis without a much more sustained and methodical effort to win over the North Korean people. Sanctions will play an important role in changing North Korea, but as I’ve said all along, they are not a complete policy. South Korea, as the only legitimate Korean government, must also devote serious thought, creativity, technology, and political will to breaking through the digital DMZ, and giving North Koreans the means to speak freely to other Koreans from Paektu-san to Halla-san, and spread a message of rice, peace, and freedom to Koreans north of the DMZ.

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NYT: How China helped N. Korea buy ski lift cable cars, and break U.N. sanctions

Yesterday, I posted about hunger in North Korea, the fact that Kim Jong-un is spending the nation’s lunch money on missiles and ski resorts, and the importance of helping the North Korean people make that connection though a comprehensive information operations strategy. The New York Times has bolstered the evidence of North Korean and Chinese culpability for this tragedy with a detailed report on North Korea’s purchase of the equipment for its ski resort through China.

Previously, NK News revealed that the Masikryeong Ski Resort was filled with foreign-sourced equipment, and identified most of the manufacturers (if you aren’t a subscriber, there’s a version here, at The Telegraph). The question left unanswered, however, was whether the North Koreans obtained the equipment directly from the manufacturers, or through China. The Times found evidence in China’s own customs data proving that it was the source of at least some of the equipment.

The cable cars for the Masikryong ski resort, which are at least 30 years old and out of fashion on European ski slopes, were made by Doppelmayr, an Austrian company, and used for years in Ischgl, a skiing town in Austria. After the resort decided to install new cable cars, the old ones were sold to an Austrian secondhand dealer, Pro-Alpin, according to Ekkehard Assmann, head of marketing at Doppelmayr.

Pro-Alpin, in turn, sold the cable cars to an unidentified Chinese company, according to Pro-Alpin’s website. The Chinese company then arranged for the equipment to be shipped to North Korea. [NYT, Jane Perlez & Yufan Huang]

The Times also examines China’s lame and risible excuses for ignoring the U.N. luxury goods sanctions it repeatedly voted for at the Security Council.

By almost any estimate, the sale of such items appears to violate the intent of United Nations sanctions meant to punish the North for its nuclear weapons program — specifically, sanctions targeting luxury goods, intended to cover products like Champagne and caviar, yachts and expensive cars.

But China, whose companies were involved in providing the equipment for the Masikryong ski resort, which opened in 2013, told a United Nations panel that those sanctions did not apply because skiing is a “normal activity” in North Korea, a country where most of the population is impoverished and food shortages are common. “Skiing is a popular sport for people, and ski equipment or relevant services are not included in the list of prohibited luxury goods,” the Chinese said, according to last year’s annual report from the United Nations panel, which monitors sanctions violations. [….]

The luxury goods sanctions have a glaring loophole: Each country is permitted to define what it considers luxury goods. The United States has published a detailed list, down to such items as vanity cases, binoculars and television sets larger than 29 inches. The European Union says “articles and equipment for skiing, golf, diving and water sports” are luxury goods and bans them from export to North Korea. [NYT]

Here is the U.S. list (see Supplement 1), and here is the EU list (see Annex III). Yet, nearly a decade after the U.N. Security Council approved resolution 1718 ….

But China has failed to publish such a list and has not honored those of other countries, the documents of the United Nations panel show. Because it has never said what it considers to be luxury goods, China can argue that cable cars for Mr. Kim’s prestige resort were permissible, even justifying them as equipment for the masses.

“China appears impervious to shame,” said Marcus Nolan, of the Peterson Institute for International Economics in Washington, who said there were no penalties for flouting the luxury goods sanctions. [NYT]

The Times also traces the genesis of Xi Jinping’s obstructionist policy toward sanctions enforcement generally.

The Chinese hope to prevent tougher sanctions for fear that the North will become a hostile neighbor, a policy that diplomats said appears to have been shaped by President Xi Jinping last summer. In talks last week with his Chinese counterpart, Foreign Minister Wang Yi, Secretary of State John Kerry made little headway in persuading China to toughen sanctions against North Korea, and he warned that the United States would most likely move ahead on its own. [NYT]

The policy isn’t entirely a new one. Diplomatically speaking, Xi is more openly obstructionist than his predecessors, but China has a longstanding pattern and practice of violating sanctions against North Korea related to proliferation, arms sales, deceptive financial practices, and luxury goods.

What neither Xi nor President Obama counted on, however, was that Congress would seize the initiative.

Tougher sanctions legislation is moving through Congress that, among other things, would target Chinese banks that do business with North Korea. The administration has been reluctant to call for such sanctions, known as secondary sanctions, and it is not clear what the White House would do about the legislation, American experts said.

“Given the broad and variegated bilateral relationship between the United States and China, U.S. officials have been reluctant to confront and economically punish China with secondary sanctions in case it should undermine other key priorities in the bilateral relationship,” said Elizabeth Rosenberg, senior fellow at the Center for a New American Security. [NYT]

The Times also gives us some absolutely breathtaking data on what Kim Jong-un is wasting on luxury goods, while most of his subjects are food-insecure, malnourished, stunted, or starving.

Chinese customs data showed that North Korea imported $2.09 billion in luxury goods between 2012 and 2014, according to recent congressional testimony by Bonnie S. Glaser, senior adviser for Asia at the Center for Strategic and International Studies. Among the items that have slipped through the sanctions are Mercedes-Benz S-Class cars, photographs of which appeared in last year’s United Nations report. An unidentified American company armored the cars, the report said. It also said that a luxury yacht worth as much as $6 million, made by a British company, Princess Yachts International, made it into North Korea and has been used by Mr. Kim.

In 2014, China exported $37 million worth of computers; $30 million of tobacco; $24 million of cars; and $9 million of air-conditioning equipment to the North, according to trade statistics from the United Nations Department of Economic and Social Affairs. In all these categories, China was the top exporter, the United Nations said. [NYT]

As the Times notes, “luxury goods may seem a relatively minor issue,” but “they help to ensure the loyalty of the tiny elite around” His Corpulency, thus helping to preserve its cohesion. Their availability also sends a signal inside Pyongyang that the regime is financially secure, bolstering the confidence of the elites in the regime’s survival.

There is also another, more important, reason why luxury goods sanctions matter. It bears repeating that the World Food Program’s operations in North Korea cost just $100 million a year, to feed just 2.4 million women and children, a figure that undoubtedly includes substantial salary and overhead costs. If the period from 2012 to 2014 is inclusive, that’s a three-year period, and an expenditure of almost $700 million a year — an even higher estimate than the one I cited here.

Yesterday, I posted evidence that for many North Koreans, the food situation remains desperate. No government has a sovereign right to steal and waste the wealth of its people when the people are hungry. Viewed this way, North Korea’s luxury goods imports and missile tests aren’t just a sanctions violation, they’re a crime against humanity. What’s especially frustrating is that it’s a crime the world has the power to prevent, by putting North Korea’s assets into financial receivership. The world’s financial regulators should put Kim Jong-un and his minions on notice that their offshore bank accounts are available to buy food, medicine, and humanitarian supplies, but not for ski resorts and luxury cars.

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Rice, peace & freedom: It’s time we told the N. Korean people the truth about why they’re hungry.

It is fitting that Groundhog Day was a busy day in North Korea. On the same day that Pyongyang announced that it would test a long-range missile, the U.N. released $8 million from its emergency aid fund “to assist [the] most vulnerable women and children” in North Korea.

Bangkok, 2 February 2016) United Nations Secretary-General Ban Ki-moon on 29 January 2016 released US$ 8 million from the UN Central Emergency Response Fund (CERF) for severely underfunded aid operations in the People’s Democratic Republic of Korea (DPRK). These funds will enable life-saving assistance for more than 2.2 million people most vulnerable and at risk of malnutrition. The DPRK was one of nine countries to receive such grants within the overall $100 million allocation to underfunded emergencies.

Undernutrition is a fundamental cause of maternal and child death and disease: in DPRK, chronic malnutrition (stunting) among under-five children is at 27.9 per cent, while 4 per cent of under-five children are acutely malnourished (wasting). Around 70 per cent of the population, or 18 million people, are considered food insecure. Food production in the country is hampered by a lack of agricultural inputs and is highly vulnerable to shocks, particularly natural disasters. Due to drought in 2015, 11 per cent of the main harvest was lost.

Health service delivery, including reproductive health, remains inadequate, with many areas of the country not equipped with the facilities, equipment or medicines to meet people’s basic health needs. Under-five children and low-birth-weight newborns are vulnerable to life-threatening diseases, such as pneumonia and diarrhoea if they do not receive proper treatment or basic food, vitamins and micronutrients.

CERF funds will be used to sustain critical life-saving interventions aimed at improving the nutrition situation in the country through reduction of maternal and under-five child mortality and morbidity. More than 2.2 million people, including 1.8 million under-five children and 350,000 pregnant and lactating women, will benefit from assistance provided by CERF funds. “The commitment and support of the international community is vital. Protracted and serious needs must be addressed” said United Nations Resident Coordinator for the DPRK, Mr. Tapan Mishra. “Humanitarian needs must be kept separate from political issues to ensure minimum living conditions for the most vulnerable people.” The United Nations will continue to work towards addressing the structural causes of vulnerabilities and chronic malnutrition through its interventions agreed with the DPRK Government. [Relief Web]

Separately, UNICEF recently warned that “25,000 children in North Korea require immediate treatment for malnutrition after a drought cut food production by a fifth and the government reduced rations.” But the true “structural cause” of the “vulnerabilities and chronic malnutrition” Mr. Mishra cites is staring us in the face.

watches3

The fact that donor nations can see this is why the U.N. must dip into its emergency fund to provide for the most urgent needs of North Korean children. No other industrialized country has ever experienced such a prolonged food crisis. Most readers probably have a general idea that Kim Jong-un could afford to feed his population by spending less on weapons, but let’s examine the figures in greater detail. First, $8 million is a small sum compared to $200 million, the total cost of the World Food Program’s (WFP) current two-year program to assist 2.4 million vulnerable women, children, and families. That’s an annualized cost of $100 million per year.

A close reading of WFP Inspector General reports reveals that a substantial, but unquantifiable amount of this is overhead — salaries of the aid workers, salaries of the North Korean workers provided to the WFP by the North Korean government, fuel purchased from the North Korean government, and other costs (such as storage) paid to the North Korean government. In other words, the actual food costs are likely just a fraction of that $100 million a year.

It also bears repeating that 2.4 million North Koreans represents a small percentage of the North Koreans who are food insecure. Recent U.N. studies have placed the percentage of North Koreans who are food insecure at between 70 percent and 84 percent, out of a population of roughly 23 million people. Before the North Korean government expelled most international aid workers in 2006, the WFP was feeding 6.5 million North Koreans. 

For comparison, North Korea spent $1.3 billion on its missile programs in 2012 alone. In 2013, it spent $644 million on luxury goods, which U.N. resolutions prohibit it from importing. Let no one say that North Korea’s missiles never killed or hurt anyone.

Yet in listing the causes of the food crisis, the World Food program lists droughts, floods, typhoons, deforestation, an “economic downturn,” a “lack of agricultural inputs such as fertilizers,” and “limited capacity to access international capital markets and import food.”

In 2015, a U.N. Panel of Experts monitoring international compliance with sanctions against North Korea found that the North Korean government had placed an intelligence officer inside the WFP’s Rome headquarters.

Recent evidence, however, suggests that the North Korean government has no difficulty importing the things it really wants.

Screen Shot 2016-02-08 at 7.25.37 AM

Satellite imagery of North Korea’s Nampho port reveals what appears to be a new 50-meter pleasure craft, according to Radio Free Asia (RFA).

The boat which was first spotted by Curtis Melvin at the U.S.-Korea Institute in Washington D.C., and can be seen docked at the naval headquarters of North Korea’s West Sea fleet. [….]

“No visitors have reported seeing or photographing this boat. We are under the impression that this boat was imported, at one point or another,” Melvin added, though admitted more me definite proof (sic) had so far been hard to come by. [….]

The new boat joins a number of other pleasure craft visible on satellite imagery around the DPRK’s coasts. In 2013, an NK News investigation revealed Kim Jong Un’s $7 million yacht, originally manufactured by British company Princess.

UN sanctions prohibit the sale of pleasure craft, cars and other luxury items to North Korea, but patchy implementation often means that prohibited goods can still find their way across the DPRK’s borders. [NK News, Leo Byrne]

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Photos obtained by NK Pro reveal North Korea’s new gondolas at the Masikryong ski resort originally came from Austria, in what could constitute a breach of UN luxury goods sanctions and EU regulations.

The recently installed cable car system now running up the Taehwa Peak in the DPRK’s Kangwon Province, once ferried passengers around the high end Ischgl resort on the border between Austria and Switzerland as part of network of 45 ski lifts and cable cars.

Coming amid momentum for fresh United Nations sanctions to respond to the DPRK’s fourth nuclear test, the gondola is the latest in a string of controversial purchases by the North Korean resort, which also include skiing equipment and specialized machinery sourced from Europe and Canada. [NK News, Leo Byrne]

A government that can import yachts and ski gondolas surely has the means to import rice.

In its 2014 report, a U.N. Commission of Inquiry that found evidence of crimes against humanity in North Korea discussed Pyongyang’s “systematic, widespread and grave violations of the right to food” in extensive detail.

660. Large amounts of state expenditure are also devoted to giant bronze statues and other projects designed to further the personality cult of Kim Il-sung and his successors and showcase their achievements. These projects are given absolute priority, which is also evidenced by the fact that they are often completed in a short period of time.  The DPRK Minister of Finance, Choe Kwang-jin, reported about the 2012 budget of the DPRK:

Of the total state budgetary expenditure for the economic development and improvement of people’s living standard, 44.8 per cent was used for funding the building of edifices to be presented to the 100th birth anniversary of President Kim Il-sung, the consolidation of the material and technological foundation of Juche-based, modern and self-supporting economy and the work for face-lifting the country.

661. In 2013, Kim Jong-un ordered the KPA to construct a “world-class” ski resort that would rival the winter sports facilities that are being built in the ROK in preparation of the ROK’s hosting of the 2018 Winter Olympic Games. When visiting the site in May 2013, Kim Jong-un reportedly “was greatly satisfied to learn that soldier-builders have constructed a skiing area on mountain ranges covering hundreds of thousands of square meters, including primary, intermediate and advanced courses with almost 110,000 meters in total length and between 40 and 120 metres in width.” 

662. A number of similar prestige projects that fail to have any immediate positive impact on the situation of the general population have been pursued, including the construction of the monumental Munsu Water Park in Pyongyang, the Rungna Dolphinarium and Pleasure Park in Pyongyang and a beach resort town in Wonsan.

(f) Purchase of luxury goods

663. The DPRK continues allocating a significant amount of the state’s resources for the purchase and importation of luxury goods, as confirmed by the reports of the United Nations Panel of Experts established pursuant to Security Council Resolution 1874 (2009), which inter alia monitors the implementation of the Security Council sanctions prohibiting the import of luxury goods. In one report, the Panel of Experts described the confiscation, by Italy, of luxury items such as high quality cognac and whiskey worth 12,000 euros (USD 17,290) and equipment for a 1,000-person cinema valued at Euro 130,000 (USD 187,310). The report further revealed that the DPRK has attempted to purchase and import a dozen Mercedes-Benz vehicles, high-end musical recording equipment, more than three dozen pianos and cosmetics. 

664. Luxury goods expenditure by the DPRK rose to USD 645.8 million (470 million euros) in 2012. Reportedly, this was a sharp increase from the average of USD 300 million a year under Kim Jong-il in October 2013. [U.N. Commission of Inquiry report on Human Rights in N. Korea, Feb. 2014]

In response to North Korea’s missile test, a State Department spokesman called on Pyongyang to “put food in the mouths of the North Korean people instead of spending money on dangerous military capabilities.” There is fresh evidence that this message would resonate with North Koreans, too. Although the North Korean government’s propaganda blames international sanctions for causing food shortages, the claim is nonsense. Professor Lee and I debunked it here, in the pages of the New York Times. The North Korean people also question that narrative.

Q: North Korea may be sanctioned again by the international community. I presumed that only ordinary people will suffer, not the upper class. What do you think about that?

A: Our life is so miserable; we are so poor with or without sanctions. We make a living selling in the marketplace, because the government no longer provides rations as they used to. Sanctions make any difference. [….]

Q: North Korean official media are showing scenes of people in Pyongyang celebrating the success of the hydrogen bomb test. How about in the provincial towns?

A: There haven’t been any meetings or gatherings regarding the nuke test. No one has any interest in it. A successful test will not provide a single teaspoon of rice. We are only concerned about the price of rice. We don’t care about that shitty bomb story; we are too busy trying to feed ourselves. [Rimjin-gang]

And separately, this:

Q: How do the people feel about the hydrogen bomb test?

A: I doubt that many people would have pride about that (the nuke test)! We don’t have enough food to eat! Everyone is making an outcry since they are doing that kind of thing even though we are so hungry! [Rimjin-gang]

North Korea watchers often speculate that the regime uses bomb and missile tests to create an us-versus-them mentality, to bolster national pride in the regime, and to distract the people from the hardships they endure. As The New York Times notes, “Most of the country, especially outside the capital, remains in dire poverty, a fact that analysts say has spurred Mr. Kim to focus attention on his nuclear program.” There’s evidence that it’s not working anymore.

She said, “People here are more apprehensive than boastful. They say the regime has finally blown it after the repetitive talks about the nuclear test. People in the markets also argue, ‘The government should have spent the money on food supplies. The state media announced that the nuclear test was a success, but who knows whether it was.’ ”

The situations in the North Korean border region remain unchanged; the residents are largely indifferent to the success of its nuclear test. The regime propagated justifications for possessing nuclear weapons and its success on the 4th nuclear test, on the basis that it defends peace and protects from the United States and its other enemies.

In the past, people in the DPRK have been proud of nuclear test success and its purported power to defend the state. But public opinion has turned against nuclear weapons over the years, with people’s perception of nuclear arms development going from ‘possession of national defense power’ to ‘waste of financial resources’. [New Focus Int’l]

The South Korean government has just announced that it will increase its loudspeaker propaganda broadcasts along the DMZ. If Seoul ever develops and deploys a comprehensive information operations strategy for broadcasting to the North Korean people, it should make the true causes of hunger in North Korea a centerpiece of its message. Seoul’s message to the people of North Korea should be a variation on a message that has long proven effective when delivered to oppressed people: rice, peace, and freedom … and reunification.

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North Korea: Dispatches from a class struggle

When you devote so substantial a part of your life to a topic as depressing as the humanitarian situation in North Korea, you have to find your rewards where you can. One small polemic reward of watching North Korea is observing it as a laboratory for Marxist dialectics and theories of class struggle as the country’s rich grow richer, and the poor are trapped in poverty.

We begin our examination, appropriately, with the most plausible analysis of North Korea’s food situation I’ve seen in recent months, via Benjamin Katzleff Silberstein:

The FAO also asserts that there was a “drastic” reduction in food rations distributed in the lean-season months of July and August, when rations are already typically low. Individual daily rations were cut twice; first to 310 grams in early July (down from the 410 grams distributed throughout the first half of the year), and then to 250 grams in the second half of July. These lean-season figures are very low, as the FAO points out, but they have been worse in the past. (Ration sizes have presumably increased since September, when the agency made its estimates.)

It is important to remember that Public Distribution System (PDS) food rations do not represent the whole story, as most North Koreans probably rely on markets for a very significant part of their food consumption. Most survey studies indicate that the majority of food people consume comes from the markets and from other private sources, like kitchen gardens. In addition, there are likely to be disparities in food access between populations in different regions and in urban and rural areas. For example, the FAO recently estimated that the proportion of underweight children is twice as large in the countryside as it is in the cities. Vulnerable segments of the population are more dependent on the PDS, and thus more likely than the average citizen to be adversely impacted when harvests decline.

This year’s malnutrition figures are indeed dire, even though malnutrition has been improving since the late 1990s. The absolute number of undernourished people is expected to increase in the 2014-2016 period, though they would represent a slightly smaller portion of the overall population than in 2010-2012. As the FAO notes in its yearly report: “The only major exception to overall favourable progress in the region is the Democratic People’s Republic of Korea, which is burdened by continuously high levels of undernourishment and shows little prospect of addressing its problems any time soon.” However, the proportion of undernourishment appears to be going down, so the trend still seems possible even though the situation is not stable. [38 North, Benjamin Katzeff Silberstein]

To put that conclusion into some statistical context, the U.N. FAO and WFP have recently estimated that between 70 and 84 percent of North Korean people are eating near the subsistence level during the lean season. Meanwhile, North Korea continues to ask for foreign aid, but donors are contributing less and less. Pyongyang itself has also cut back on commercial grain imports from China.

The small bright spot in this picture is private agriculture, which — like South Korean agriculture — appears to have had a good harvest last year.

Silberstein’s piece is well worth reading in full, if only for his argument that “neither the extent nor the content” of the much-ballyhooed agricultural reforms in North Korea “is fully known,” and that the basis for the alleged reforms “remains anecdotal at best.” Also worth reading is this analysis by Marcus Noland, questioning how much we really know about the food situation in the North.

Now, for a look at how the other half eats:

“While Party cadres and the donju spend hundreds of dollars per meal at fancy restaurants, ordinary citizens scrape by day to day on what they can earn at the market,” she asserted.

“On Independence Road, near the gym (Pyongyang Gymnasium),” she said that the donju and the elite can be seen frequenting such upscale restaurants like “The Golden Cup,” known for its high end cuisine; another popular eatery is a nearby bistro specializing in smoked duck.  A single meal at either of these establishments starts at $50, generally running a customer far more.

“A group of four can easily consume at least $200 worth of food at one meal,” she noted.

$200 is the equivalent of 1,600,000 KPW, which, at the current market price of 5000 KPW per 1 kg of rice, can purchase approximately 320 kg worth of rice, the staple of the North Korean diet.

Although the number of Pyongyang citizens earning decent money as markets flourish appears to be on the rise, the disparity in wealth is also growing owing to the monopoly market power of the authorities. Their grip on the market allows them to enjoy a lifestyle that our source compared to “heaven on earth”, while the “rest of the people are left out in the cold.” [Daily NK]

At least some of the poor might accept this rising inequality more easily if they believed that they, too, had a chance to rise. For most, their songbun is a barrier to economic mobility.

[T]he donju (or new moneyed class) are flocking to Pyongyang before the year’s end in order to compete with one another by patronizing elite restaurants and buying extravagant gifts.

In a telephone conversation with the Daily NK on December 4th, an inside source from Pyongyang said, “In downtown Pyongyang, fancy restaurants, famous hotels, and foreign currency stores, are thronging with donju who have come from the countryside. It seems that they’ve all come here after completing their winter preparations and other end-of-year year tasks in order to spend money like there is no tomorrow.”

An additional source in the capital corroborated this news.

Moreover, he noted, “The end of November is the time when the State Planning Commission issues import/export licenses, so during this time central state agencies call those heading up local foreign-currency earning units (i.e. donju) up to Pyongyang. Under the pretense of hosting criticism sessions for foreign-currency earning or production, cadres with central state organs gather for a luxurious reception and donju present them with elaborate bribes in order to secure the licenses required to run their operations.”

“The donju gather in downtown Pyongyang at first-rate hotels such The Yang-gack Do Hotel, The Chang-gwang Hotel, and The Ansan Hotel. They spend the entire day at fancy restaurants, spending buckets of cash without a care in the world. At some of these restaurants, it is normal to spend approximately US $300- $400 on a single meal. That adds up to thousands of dollars for all the people around the table,” he explained.

According to inside sources, US $100 now trades as KPW 860,000, or 172 kg of rice in the North Korean markets. This amount could keep an ordinary person happily fed for a duration of ten months. So that means by spending $400 on a single meal, the donju are essentially spending the equivalent amount that it would take to feed a family of four for ten months. [Daily NK]

The class disparity also extends to how people heat their homes.

[B]y looking at whether residents elect to use coal or wood as their tinder, we can know a lot about their lifestyle and socio-economic class. It’s also possible to know about their work conditions. First of all, those with the means to afford it have a higher probability of selecting firewood to keep their house warm. If you calculate the price of the total amount of wood needed for the winter season, it comes out to about 5 cubic meters or 2 tons of coal. So the total cost of wood would be about 750,000 KPW (about US $90.70), and the total cost of coal would be about 660,000 KPW (about US $79.90). When I break down the prices like this, I think it becomes evident what kind of resident would buy the more expensive option.

Those who use coal are using coal pay 90,000 KPW (~ US $10.90) more than those who pay for wood. This might not sound like a big difference, but for many North Korean residents who are forced to scrimp and save, this is a significant amount. That is why our source has alerted us that, as a generality, the well-off residents tend to use firewood. [Daily NK]

Finally, the Daily NK confirms what we can only assume — that this widening class disparity is driving class resentment:

In order to take care of loyal inner circle, Kim Jong Un is building luxurious apartments and private housing in Pyongyang. However, this is causing serious resentment from those who do not stand to benefit from the exclusive provisions.

In a telephone conversation with the Daily NK on December 1st, an inside source from Pyongyang said, “Lately, people have been using the word ‘economic stratification’ more frequently. This frustration and discontent stems mainly from the high-cost construction projects occurring around Mirae (future) Scientists’ Street. The brunt of this criticism is that the regime has stopped the public food distribution system, yet continues to cater to the rich and politically connected class.”

Daily NK crosschecked this information with an additional source in the capital.

“Residents who live on the outskirts and suburbs of central Pyongyang do not receive electricity in a reliable manner. They are forced to exist in pitch black darkness. Some people are saying things like, ‘The cadres exist in a separate world from us,'” he said, adding that one residents “cursed the regime while lamenting his hard fate.”

“Cadres who are in the Central Party or work in foreign currency-earning companies show off their wealth by blowing through US $1000 in a single meal. An entire family of ordinary people could survive off that amount for a whole year. That’s why people feel animosity towards high-level cadres.” [….]

“The monthly salary for a worker in Pyongyang’s textile factory is anywhere from KPW 300,000(about US $36.00) to KPW 1,000,000(about $121.00). At companies in fringe areas, the going rate is between KPW 3,000 (US 0.36) and KPW 4,000(us 0.48). In this sort of situation, the residents are forced to go to the markets and sell in order to make a living,” he explained.

By the source’s estimation, high-level cadres such those in the Korean Workers’ Party and Ministry of People’s Armed Forces account for 10% of the population but hold most of the country’s wealth. Below them are the donju (masters of money, or new moneyed class), who occupy about 20-40%. The remaining 50% is made up of “normal folks, who really do struggle to get by and provide for their family.”

“A while ago, it was said that even though we were subsisting on corn meal soup and scraping to get by, those in Pyongyang weren’t much better off. But things have changed. Now there are residents who say they’d prefer to farm in the countryside rather than watch the cadres show off their extravagant wealth,” the source concluded. [Daily NK]

For much of the 1990s, Americans watched reports come in of the horrible famine in the North and wondered when the people would finally overthrow this obscene oligarchy. It didn’t happen, because historically, starving people have almost never overthrown governments. They are too preoccupied with survival to take on additional struggles against a repressive state. Instead, it is class inequality that has historically destabilized oligarchies. We in the Outer Earth often assume North Korea to be socialist because it pretends to be when foreigners are watching. The reality increasingly looks like the economic totalitarianism of Stalin-era socialism, combined with the inequality of gilded-age capitalism.

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North Koreans need food & medicine, not Guus Hiddink’s “futsal” stadium

hiddinkSouth Koreans remember Dutch soccer coach Guus Hiddink as the man who led their team to a successful performance in the 2002 World Cup. But when the history of a united Korea is written, North Koreans are likely to remember him less fondly. Hiddink has just returned from Pyongyang, where he signed a deal to help Kim Jong-Un build yet another expensive leisure facility that falls low on the average North Korean’s hierarchy of needs — a new “futsal” stadium:

“It was a short but a good visit,” [Hiddink] told reporters at Gimpo International Airport in western Seoul. “We talked about installing a Dream Field. I was eager to do one or more even in the North. We signed an agreement that as soon as possible — hopefully before the summer — we’ll have the first Dream Field in Pyongyang.”

The Dutchman said he was already looking forward to his next visit to North Korea, possibly next summer.

“I challenged them to start building what we agreed,” he added. “We will supply, as soon as possible, the necessary equipment and then they can start. If you want something, you can do it very fast.” [Yonhap]

In case you were about to ask:

Screen Shot 2015-11-10 at 7.32.26 AM

The U.N. World Food Program’s 2015 needs assessment gives us a better idea of that hierarchy, for those North Koreans who are excluded from its leisure class:

Screen Shot 2015-11-10 at 7.38.14 AM

These figures, which rely on regime-supplied statistics, may overstate or understate the problem to some degree, and the results of various U.N. surveys vary, depending on how one measures North Koreans’ misery. For example, this 2013 U.N. survey found that 84% of North Koreans have “poor” or “borderline” food consumption. Earlier this year, the U.N. reminded us that many of North Korea’s children will feel the effects of malnutrition for the rest of their lives.

More than a fourth of all North Korean children are stunted from chronic malnutrition, and two-thirds of the country’s 24 million people don’t know where their next meal is coming from, the United Nations said Friday.

The report illustrates a major domestic challenge for North Korea’s new young leader, Kim Jong Un.

A team from the U.N.’s Office for the Coordination of Humanitarian Affairs, reporting from North Korea, found that 2.8 million North Koreans “are in need of regular food assistance amidst worrying levels of chronic malnutrition and food insecurity.” It said 4 percent of North Korean children are acutely malnourished. [AP]

While North Korea’s mass casualty famine probably ended around 2000, there were reports of famine on a much smaller scale in 2012, and harvests are believed to have fallen again this year. It’s almost certain that at least some North Koreans who lose their state rations or the support of their families continue to starve to death, out of sight and out of mind, even now.

There is also the complete breakdown of North Korea’s health care system, to the extent that people who can’t afford to bribe doctors into treating them have turned to opium and methamphetamine as alternative medicines.

Guus Hiddink’s futsal stadium would join a long list of new leisure facilities for Pyongyang’s elite, including a dolphin aquarium, a 3-D cinema, a water park, and a floating buffet — amenities that are beyond the imagination of most North Koreans. In 2013, Kim Jong-Un reportedly spent $300 million on a leisure and sports facilities, including a ski resort filled with equipment imported in violation of U.N. sanctions. That same year, His Corpulency spent $644 million on luxury items like flat-screen TVs, sauna equipment from Germany, Swiss watches, and expensive booze. Also that same year, the World Food Program asked foreign donors to contribute $200 million toward a two-year program to feed 2.4 million North Korean women, children, and infants — just a fraction of those in need.

Given that the U.N. Security Council banned the export of luxury goods with after the passage of Resolution 1718 in 2006, can this possibly be legal? Due to the uneven and dilatory implementation of the resolution, it’s almost impossible to be sure. The UN’s tragically incomplete (but non-exclusive) list, still not filled out nine years later, specifically mentions only jewelry, yachts, luxury cars, and racing cars. The EU list prohibits “[a]rticles and equipment for skiing, golf, diving and water sports,” and “[a]rticles and equipment for billiard, automatic bowling, casino games and games operated by coins or banknotes,” but would theoretically allow a European supplier to sell Kim Jong-Un a curling rink, jet skis, or bobsleds. The U.S. Commerce Department’s list of luxury goods is the broadest, and includes any “[r]ecreational sports equipment.” Theoretically, then, Treasury could block any dollar payments to facilitate Hiddink’s project. (The North Korea Sanctions Enforcement Act would cut this semantic Gordian Knot by adopting the U.S. Commerce Department list as its definition.)

The obscenity of a nominally socialist state, which monopolizes most of the nation’s resources, squandering the meals of starving kids on luxuries for a tiny elite is the reason why the U.N. adopted the luxury goods ban. I’ll take that argument a step further: it’s a crime against humanity — specifically, what a U.N. Commission of Inquiry has described as “the inhumane act of knowingly causing prolonged starvation.” By knowingly helping Kim Jong-Un to misallocate resources that belong to the North Korean people, and which should be used to fulfill their rights to food and medical care, Hiddink makes himself an accessory to this crime, and places himself before the judgment of history, and perhaps, one day, of the law itself.

If the UN can’t define “luxury goods,” if the EU can’t interpret the UN resolution’s plain language to address the evil it was meant to remedy, and if the U.S. won’t enforce its own regulations, then the good people of Europe and the Netherlands must condemn and ostracize Hiddink for his appalling ethical misadventure.

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The more North Korea trades, the more it reforms, right? Wrong.

Yesterday, I questioned the premises of economic engagement with Pyongyang — that Pyongyang is socialist, that trade is capitalism, that capitalism inexorably erodes socialism, and that capitalism (least of all, state capitalism) is inherently liberal and peaceful. I argued that Pyongyang adopted state capitalism decades ago, and that it has grown steadily more menacing and repressive ever since. It feigns socialism to feed our false hopes of reform and arguments against sanctions, to tempt investors, to recruit apologists who embrace its socialist pretenses, and to justify the economic totalitarianism it uses to starve and isolate the vast majority of its subjects. Pyongyang doesn’t practice socialism; it imposes it on the underclasses. The underclasses are the only ones who can change that.

Sincere advocates of changing North Korea by engaging Pyongyang may accept that their best intentions didn’t work, yet still not lose heart. If they’re willing to rethink engagement in terms of engaging the people rather than the state, they’ll find more reason than ever to believe that change is in sight. For example, it now seems likely that within the next five years, anyone, anywhere in the world, will be able to access the internet. The signal might come from Google’s Project Loon, or Facebook’s Internet.org, or maybe some combination of both. Universal internet access will shatter Korea’s virtual DMZ; eventually, it can break the physical one, too. The day is coming when North Koreans will be able to attend South Korean classes, sermons, movies, clinics, lectures, and family reunions. There can be a revolution in the people-to-people engagement that the Sunshine Policy promised, but couldn’t deliver, if South Koreans have the vision and the courage to weave a virtual Ho Chi Minh Trail of clandestine communication from South to North. North and South Koreans can use this network to rebuild the North’s civil institutions from the ground up, to establish shadow governments, to build the capacity to resist the state’s most repressive policies, and to begin the process of reconstruction.

Today, however, the South Korean government remains too timid to broadcast to its northern countrymen on AM radio. My friend (and now, National Assemblyman) Ha Tae Kyung, interviewed by the Daily NK, calls for Seoul to make broadcasting a part of its unification policy, which at present desperately lacks a Phase 2. Ha wonders how the Blue House and the Unifiction Ministry can be serious about reunification when they haven’t called for radio broadcasts to the North, broadcasts that could play an important part in the cultural and social reunification.

Of course, Pyongyang will try to enforce the poverty and isolation of its subjects as if its survival depends on it. Just as it cracked down on its northern border, tracks down and arrests the users of Chinese cell phones, and sends distributors of foreign media to the gulag, it will try to arrest, imprison, terrorize, or kill anyone who listens to South-to-North broadcasts, or who makes inter-Korean phone calls. Yet the right policies on our part can give the people a fighting chance.

This picture taken on April 6, 2013 shows a Chinese border guard standing on a look out post by the bridge that crosses the Yalu river to the North Korean town of Sinuiju across from the city of Dandong. The US is pressuring China's new President Xi Jinping to crack down on the regime in North Korea or face an increased US military presence in the region, The New York Times reported late April 5, 2013. CHINA OUT AFP PHOTO (Photo credit should read STR/AFP/Getty Images)

[STR/AFP/Getty Images, via WaPo]

Isolating a country costs money, and with the decline in the Chinese economy, Pyongyang may be having more difficulty finding that money. The Wall Street Journal‘s Alastair Gale cites Chinese trade data showing that “[t]he value of North Korean exports to China … fell 9.8% through August from the year-earlier period … accelerating from a 2.4% decline last year.” Meanwhile, another report confirms what I’ve long suspected — that the security forces are funding themselves through some of this trade:

North Korea’s feared State Security Department (SSD) has established a new “trade organization” tasked with earning foreign currency from China, according to sources who say the branch will likely use its broad powers to tap into channels used by the impoverished nation’s subsistence smugglers.

The SSD, also known as the Ministry of State Security, set up the organization “very recently” with its headquarters in the capital Pyongyang and several satellite offices in “local areas” of North Korea, a source from North Hamgyong province, along the border with China, told RFA’s Korean Service.

“While the whole nation is aware of the shortage of foreign currency in North Korea, it seems strange to establish a new trade organization under the SSD, which traditionally monitors the population’s activities to ensure they do not contravene the rules of the regime,” said the source, who spoke to RFA on condition of anonymity, after recently visiting China.

In addition to keeping an eye on the political actions of the public in North Korea, the SSD’s secret police force keeps tabs on North Koreans who travel to and from China, as well as telephone communications in border areas.

Sources said the move will likely have implications for North Koreans who subsist on Chinese currency they earn by running smuggling operations over the border. [….]

A source based in China who maintains a close relationship with North Koreans earning foreign currency there told RFA that a “large number of people belonging to the SSD” had been dispatched across the border since spring to “monitor and control the activities of North Korean residents” in the country.

“Since they are ostensibly working for foreign currency, they are called ‘trade representatives,’ just like others [who have been sent to earn cash for the regime],” said the source, who also declined to provide his name. [Radio Free Asia]

The regime’s use of trade to finance this crackdown sets up a zero-sum competition between state capitalism and free-market capitalism, the kind that has genuine potential to transform North Korean society. The SSD’s profiteering is neither a quiet capitalist revolution nor a sign of reform that is washing away the foundations of socialism. It pays for the enforcement of isolationism, and makes North Korea more unequal, oligarchical, and totalitarian (read: fascist). This may also be true of Pyongyang’s other trade relations, too, but we can only guess, because its finances are so opaque that not even the Treasury Department knows how it uses the proceeds.

In addition to broadcasting and people-to-people engagement, then, sanctions targeting the SSD’s assets are an important part of a policy to protect North Koreans from censorship and help them liberalize their society. By starving the security forces of cash, anti-censorship sanctions would deny the SSD the means to equip and pay its officers. They would foster the corruption that facilitates smuggling, and preferentially support engagement through independent free markets. The use of sanctions to fight censorship and support freedom of expression is nothing new. Treasury has anti-censorship sanctions against Iran to “facilitate communications by the Iranian people.” Why not North Korea?

Ha is dismissive of sanctions, perhaps because he lumps all kinds of sanctions together, and (like most people) doesn’t know the significant gaps in their enforcement. It’s a common myth that sanctions against Pyongyang are still strong, although I’ve previously debunked this myth in detail. Ha argues that the trade sanctions Seoul imposed on Pyongyang in 2010, after the attack on the ROKS Cheonan, haven’t made Pyongyang apologize or come to the negotiating table. He concludes that “economic sanctions don’t have effects, but broadcasts do.”

Respectfully, I think Assemblyman Ha is missing a few key points, including the role sanctions can play in protecting his North Korean listeners. First, the lifting of these trade sanctions has been at the top of Pyongyang’s list of demands since 2010. If it can be argued that loudspeaker propaganda was effective because Pyongyang sounded desperate to switch it off, the same can be argued of the bilateral trade sanctions.

Second, by lumping all “sanctions” together, Ha overlooks what is beyond serious dispute — that financial sanctions hit Pyongyang where it hurt most:

Practically overnight, banks throughout the region, even in China, began turning away or throwing out North Korean government business. By this one simple act, Mr. Zarate writes, “the United States set powerful shock waves into motion across the banking world, isolating Pyongyang from the international financial system to an unprecedented degree.” [….]

Then, Mr. Zarate writes, a North Korean representative contacted the United States, seeking relief from the 311. At the State Department’s insistence, negotiations began in Beijing, and appeared to end when a Chinese bank volunteered to handle a measly $25 million of North Korean money the authorities in Macau had frozen.

Mr. Zarate writes that “the amount of money wasn’t the issue” and that the North Koreans “wanted the frozen assets returned so as to remove the scarlet letter from their reputation.”

Then, he says, something amazing happened. Despite its government’s support of North Korea, the Chinese central bank refused to approve this solution, indicating that it, too, wanted nothing to do with a bank hit by a 311. “Perhaps the most important lesson was that the Chinese could in fact be moved to follow the U.S. Treasury’s lead and act against their own stated foreign policy and political interests,” he writes. “The predominance of American market dominance had leapfrogged traditional notions of financial sanctions.” [N.Y. Times Review, “Treasury’s War,” by Juan Zarate]

Third, the May 24, 2010 sanctions are narrow sanctions with narrow purposes — they exclude Kaesong, after all. Ha has a vision for reunification and has articulated it; Park Geun-Hye doesn’t and hasn’t. Still, even Park’s limited goals can be valid ones. Trade sanctions deter Pyongyang by imposing a (small) price for murdering South Koreans with premeditation and malice aforethought. They’re also consistent with U.N. Security Council resolutions, which prohibit member states from providing “public financial support for trade with the DPRK (including the granting of export credits, guarantees or insurance to their nationals or entities involved in such trade) where such financial support could contribute to the DPRK’s nuclear or ballistic missile programmes.” South Korea voted for those sanctions when it was a member of the Security Council. The other members of the Security Council approved them, in large part for South Korea’s own protection. Seoul can’t very well ignore them now.

We now have evidence that regime-controlled trade funds the oppression that isolates North Koreans, retards change, and helps Pyongyang repress the people who would listen to the broadcasts Ha supports. If the world wants North Korea to change, it has to give free markets — North Korea’s only independent institutions, on which most North Koreans depend for their survival — a fighting chance to survive. As long as Pyongyang’s oligarchy has unrestricted access to our financial system, it will use it to isolate and repress its people. We should seek to shift North Korea’s internal balance of power away from the ones with the guns and food toward those without. That means giving North Korea’s people information and access to markets. That, in turn, means blocking the funds that pay for Pyongyang’s policy of isolation and oppression.

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The Myth of North Korean Socialism: How Pyongyang’s Profiteers Fooled the World

Over this long weekend, I’ve been reading Brian R. Myers’s new book, “North Korea’s Juche Myth,” a copy of which Prof. Myers was kind enough to send. Myers argues that juche, that cryptic ideology reporters often mention but never explain, is a sham ideology that is both overblown and seldom understood, by foreigners as well as North Koreans. Very roughly translated, juche means that man must be the master of his own destiny (in contrast to North Korea’s reality, in which individuality is uniquely suppressed). Myers argues that juche is a loanword from the Japanese zhuti, first seen in an 1887 Japanese discussion of Kant, and became a term of common usage in both Koreas. Pyongyang built the Juche Myth to give Kim Il-Sung ideological gravitas, and to decoy naive foreigners away from its real — and more implacable — ideology of racism, nationalism, and xenophobia, which Myers described in “The Cleanest Race.” (You can hear Myers explain his argument here, in an interview with Chad O’Carroll.) Myers argues that Pyongyang maintains this duality (triality?) by code-switching between its foreign propaganda, its propaganda for its elites, and its propaganda for its underprivileged classes. (As we have seen.)

I’m not prepared to declare myself convinced of the entire argument before I finish the book, but I’m already mulling my own companion volume: “North Korea’s Socialist Myth.” The thesis of this book (or rather, this post) will be that Pyongyang’s claims of socialism are a sham, meant to lure naive or self-serving foreigners with more money than good sense, with a mirage that its profiteering represents progress toward ever-receding reforms. In recent years, that mirage has gained Pyongyang $7 billion dollars in South Korean aid, perhaps billions more from other gullible investors, and probably billions in sanctions relief from those who did not want to interfere with these phantom reforms.

By feigning socialism, Pyongyang also gains a small, fanatical, and almost influential following of apologists on the far left — apologists who are themselves willing to overlook not only its gross inequality, but also its racism (Barack Obama: “a wicked black monkey … an ugly sub-human … suitable to live among a troop of monkeys in the world’s largest African animal park, licking at the crumbs tossed by onlookers“), its homophobia (Michael Kirby: “a disgusting old lecher with 40-odd-year-long career of homosexuality”), its misogyny (Park Geun-Hye: “a whore [who] lifts her skirt to lure strangers“), its acts of war, its crimes against humanity, and the violence of their own allies.

Socialist ideology also justifies the economic totalitarianism by which Pyongyang prevents its subjects from achieving economic independence, and the other forms of independence (of thought, of movement, from want, from fear) that would inevitably follow. Socialism is not something that Pyongyang practices, it’s something that Pyongyang imposes on the weak and vulnerable. Its real economic policy is — and has long been — unrestrained state capitalism,* shielded by deceptive financial practices, and revealed only when its agents are caught carrying it out. Which is often, for those who are paying attention. (* See comments.)

Pyongyang has long been a profiteer from the un-socialist vices of gambling (both online and in pachinko parlors), narcotics smuggling, slaverymoney laundering, cigarette smuggling, currency counterfeiting, gold smuggling, pharmaceutical counterfeiting, the trade in endangered species, and even prostitution. For decades, it has permitted as much capitalism as necessary to maintain its elites, its security forces, and its weapons programs, but never enough to allow meaningful interaction between foreign ideas and non-elite North Koreans. The long-predicted penetration of capitalism into North Korean society did happen — not because the regime accepted reforms, but despite Pyongyang’s best efforts to suppress it. (Since the succession of Kim Jong-Un, once touted as a Swiss-educated reformer, the regime has made significant progress toward stanching the flow of goods and information into the peoples’ economy.)

Pyongyang’s controlled isolation was not a difficult thing to foresee, for those who read Nicholas Eberstadt’s quotations of past North Korean policy pronouncements. A sample:

It is the imperialist’s old trick to carry out ideological and cultural infiltration prior to their launching of an aggression openly. Their bourgeois ideology and culture are reactionary toxins to paralyze people’s ideological consciousness. Through such infiltration, they try to paralyze the independent consciousness of other nations and make them spineless. At the same time, they work to create illusions about capitalism and promote lifestyles among them based on the law of the jungle, in an attempt to induce the collapse of socialist and progressive nations. The ideological and cultural infiltration is their silent, crafty and villainous method of aggression, intervention and domination….

As a reflection of Pyongyang’s doctrine, this statement is as true of North Korea’s peoples’ economy as it is irrelevant to Pyongyang’s palace economy. In North Korea, socialism is for little people. For decades, Pyongyang sustained itself on state capitalism while enforcing socialism on the expendable underclasses, wallowing in bacchanalian luxury while a million or two people starved to death. North Korea remains one of the world’s least equal societies.

KJU ski kju airport

This week’s reporting on North Korea’s big parade reenforces the evidence of widening inequality, showing us both the relative prosperity of Pyongyang (James Pearson, Reuters), but also the unabated poverty of the rural provinces (AP, Eric Talmadge), and the hardships of those who must still evade tightened border controls to work in China illegally, to support their families at home (Anna Fifield, Washington Post).

Pyongyang, by contrast, has now had decades of exposure to capitalism, but capitalism has not pacified North Korea, any more than it pacified Hitler’s Germany, Imperial Japan, Baathist Iraq, or Xi Jinping’s China. Rather, in all of these cases, state capitalism fueled each state’s military-industrial complex. The experience of the last two decades provides no basis to believe that capitalism on Pyongyang’s terms will transform North Korea into anything but a more stable, more repressive, and better-armed version of itself.

Of course, to accept what should be obvious by now, one must abandon the hope which sustained a fading generation of American and South Korean policymakers — that Pyongyang will eventually allow more than minimal economic reforms, and that trade (beyond enriching the state and perpetuating its policies of repression at home and extortion abroad) will eventually lead to broad economic, social, and political reforms. Pyongyang’s construction boom, cell phones, traffic jams, and Mickey Mouse merchandise have become the slender reed on which the Sunshine school sustains itself. But so what?

For years, I’ve challenged advocates of “engagement” with Pyongyang — as opposed to engagement with the North Korean people — to name a significant and positive change their policies have brought about. I have yet to hear an answer. The comments are open.

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Kim Jong Un seeks friends and funds abroad as he isolates his people.

In the three years that he has been in power, His Porcine Majesty has found plenty of time for Dennis Rodman, but none for meetings with foreign leaders. Suddenly, in the last two months, he has flirted with (1) a summit with South Korean leader Park Geun-Hye, (2) inviting Japanese Prime Minister Shinzo Abe to Pyongyang, (3) and a visit to Vladimir Putin in Moscow in May. His central bank even “committed itself to implementing the action plan of ‘international standard’ for anti-money laundering and combating the financing of terrorism.” (I’m sure Pyongyang will find some way to reconcile this with its arms sales to Hezbollah and Hamas.)

If you believe that talks with North Korea are immediately capable of solving anything, or that they are an end in themselves, you may be pleased that Kim Jong Un has developed this urgent interest in diplomacy. What accounts for this belated quinceañera, assuming that any of these meetings comes to pass? Only Kim Jong Un knows, but I doubt it has anything to do with a yearning for more intelligent companionship. There’s almost certainly a financial motive, if not more than one.

One motive may be a growing threat of sanctions. Kim’s charm offensive began just after December 19th, when FBI and President Obama announced that North Korea had hacked Sony Pictures and threatened audiences for “The Interview.” Almost immediately, Congress called for stronger sanctions, and centrist figures in the foreign policy establishment, including Richard Haass and Winston Lord, began calling for regime change. President Obama himself suggested that the collapse of North Korea’s system was inevitable, although he didn’t declare an intent to catalyze that result.

On January 2nd, President Obama signed Executive Order 13687, authorizing sanctions against all entities and officials of North Korea’s government and ruling party, and (more importantly) authorizing secondary sanctions against the Chinese, and other entities that provide Pyongyang its regime-sustaining hard currency. The order was potentially sweeping and devastating, but in its actual impact, it reached only three entities that were already sanctioned, and ten mid- to low-level arms dealers. But the President also said that this was only a first step, which left Pyongyang scurrying to secure its financial lifelines.

Pyongyang’s charm offensives always seem to come just as the political will waxes to enforce sanctions against it. The charm offensives play on the individual interest of each interlocutor — Park Geun Hye’s domestic unpopularity, Shinzo Abe’s desire to bring abductees home, Putin’s search for ways to f**k with Obama — to disrupt any coordination among them. It works because we’re dumb enough to let it. And once sanctions enforcement wanes, so will Kim Jong Un’s interest in diplomacy.

One thing is clear enough: a credible threat of sanctions certainly hasn’t done any harm to prospects for diplomacy with North Korea. I could also say, with equal conviction, that they haven’t harmed John Hinckley’s odds of marrying Jodie Foster.

~   ~   ~

Another possible explanation is a series of reports suggesting that North Korea’s trade relations with China are declining. For one thing, fewer North Koreans are traveling there:

Overall figures for North Korean residents entering China annually totaled between 100,000-120,000 until 2010 before jumping to 150,000 in 2011. A steady period of continual increase in visitors followed until 2013, when the number of North Koreans traveling to China reached an all-time high of 200,000, roughly half of whom noted their reason for making the trip as “looking for work.” Aside from finding employment, 34,000 went to conduct business or attend a conference, and 1,500 went purely to travel. This represents a 60% and 50% respective reduction when compared to last year’s figures. Visits to friends and relatives dropped to 1,100–one-third of those making the trip for the same reason in 2013.

Male visitors [150,000] composed five times total amount of females [30,000] visiting China from North Korea. Most North Koreans [77,000] traveled by boat for the trip. [Daily NK]

North Korean agents who do travel to China are also having more difficulty doing business there. There’s no evidence this has anything to do with sanctions. It appears to be because of a combination of a sagging Chinese economy and the lingering effects of the Jang Song-Thaek purge. After that purge, I posted here that the regime had called home large numbers of its China-based money men, presumably men who were loyal to Jang or thought to be, and that the money men had stayed away in droves. Subsequently, I posted about another reported defection of a senior financier in Russia. That trend continues:

A source in a northeastern Chinese city, who spoke on condition of anonymity because of the sensitivity of the issue, said only about 30 percent of the North Korean businessmen have returned to China after being summoned.The summonses are also believed to be part of efforts by North Korea to redistribute the “rights of doing businesses with China,” a key source of earning hard currency, to its ruling elite, the source said.”The replacement of businessmen loyal to Jang Song-thaek has been gradually carried out and a lot of North Korean businessmen were summoned until late last year,” the source said. “Of those being summoned, only about 30 percent returned to China.”There are no official data on how many North Korean businessmen are working in the Chinese border cities.A second source in another Chinese border city with North Korea said that about 170 North Korean businessmen in the city were replaced over the past year.With Chinese investor confidence eroding over the North’s unpredictable behavior, the new North Korean businessmen come under further pressure in building business connections with their Chinese counterparts, the second source said. [Yonhap, via the Korea Herald]

Not only is the sagging Chinese economy hurting Bureau 39, but according to the report, “Chinese investor confidence” is also “eroding.” One reason may be the arbitrary behavior of North Korean officials, including their inclination toward unilateral price increases and demands for bribes and prostitutes. I can’t speak to the latter concern, but the former concern can’t have improved since Kim Jong Un had Jang shot for “selling off precious resources of the country at cheap prices.” This is consistent with evidence of a sudden onset of distress in North Korea’s mining industry, although I can’t say whether poor investor relations are a cause of the problems or a consequence of them.

The report cites Korea Trade and Investment Promotion Agency (KOTRA) figures, according to which, “North Korea’s annual trade with China fell 2.4 percent from a year ago in 2014,” from $6.54 to $6.39 billion, “marking the first decline since 2009.” These figures are sourced to Chinese government statistics, which is one reason to distrust them. For example, we read a lot of reporting last year that China had cut off North Korea’s crude oil supply, only to find that China had merely reclassified its trade as aid, or supplied Pyongyang with refined petroleum products (such as jet fuel) instead.

The report also claims that “North Korea’s exports of coal to China slipped 17.6 percent from a year ago to $1.13 billion, marking the first drop in 8 years.” I see more extrinsic evidence that that report is accurate.

And there are other signs of trouble: it would be a snub for Kim Jong Un to visit Russia before he visits China, and it was a snub for the leaders of China and South Korea to meet before the leaders of China and North Korea met. China didn’t send a representative to Kim Jong Il’s latest birthday party, either. This doesn’t yet mean that China has broken with North Korea. It certainly doesn’t mean that China wants to destabilize North Korea. It bears watching, however.

~   ~   ~

In other ways, Pyongyang is intensifying its isolationism. The ones that have attracted the most media attention are its bans on foreigners entering North Korea for a marathon and its creepy Arirang Festival. (By contrast, it recently granted permission for this “peace” march by a group of left-wing activists, led by Christine Ahn and Gloria Steinem). The dubious pretext for Pyongyang’s isolationism is that it is a precautionary quarantine against Ebola. This has inconvenienced two groups of useful idiots — the North Korea tour companies and the slummers who use them. I don’t see the down side to that. In the long run, it will mean fewer hostages for Pyongyang, and less hard currency for its bank accounts.

Why would Pyongyang shut down this lucrative, low-risk traffic in people with more money than sense or soul? No one knows but Pyongyang. Maybe it really is terrified of Ebola, yet confident that Gloria Steinem isn’t a carrier. Then again, maybe it’s terrified of a contagion of another kind.

For years, the pro-“engagement” argument for tourism in North Korea has been that there is something transformational, even dangerously subversive, about it that minders, deceptions, and other controls can’t contain. (Somehow, I doubt that Koryo Tours and Young Pioneers make the same argument to their contacts in Pyongyang.) I’ve usually been dismissive of this argument, although I’d be genuinely interested in hearing any evidence that Pyongyang thinks it has anything to fear from this kind of tourism. Even if that argument had any merit, Pyongyang knows how to deal with foreign subversive influences. Maybe it just did.

~   ~   ~
Kim Jong Un has been isolating low-caste North Koreans since the very beginning of his reign. His regime continues to do that by terrorizing traders, cracking down on cell phones, and blocking the flight of desperate people:

“A family of four from North Hamkyung Province attempted to escape with the help from a border guard and a smuggler near the end of last month; however, someone tipped off the proper officials, resulting in their arrest,” a source in Yangkang Province reported to Daily NK on February 4th. “To expedite the family’s escape, the smuggler got a number of soldiers, all of whom he deemed trustworthy, involved. But too many caught wind of the family’s plot to defect, which led to the family’s eventual capture.”

The family’s eldest son purportedly fled while being held in custody, leaving behind the parents and their younger son to endure relentless interrogation at a SSD-run detention center, where they are “as good as dead,” according to the source, because not only were they themselves planning to defect, but now their son presumably succeeded in doing so despite being held in custody. [Daily NK]

Human Rights Watch has documented the border crackdown in a new report, which you can read here.

“North Korean authorities are using brutal punishments to shut the door on people fleeing the country, and cracking down on those who share information with the outside world,” said Phil Robertson, deputy Asia Director. “Kim Jong-Un is trying to silence news of his systemic and pervasive rights crimes by going after the messengers, such as people with connections in South Korea or those who can help North Koreans flee there.”

The North Korean leadership has made clear the country must redouble its efforts to remain shut to the outside world.

“We must set up two or three layers of mosquito nets to prevent the poison of capitalism from being persistently spread by our enemies across the border into our territory,” said Kim Jong-Un, North Korea’s supreme leader, during a speech at the 8th Conference of Ideological Workers of the Korean Worker’s Party on February 25, 2014. “We also have to be active to block the imperialists’ plots for ideological and cultural invasion.” The “mosquito net” system Kim referred to was developed in the North to attract the inflow of foreign investment while blocking the infiltrations of foreign ideas, news, and culture. [….]

According to the escapees, the North Korean government has also been actively tracking down unauthorized phone calls from cell-phones operating on Chinese service provider networks being used by people in the North Korean border areas to call to China or South Korea. “The phones have no signal in the cities anymore and I have heard they even have mobile technology to find the exact location of the caller even after you hang up,” said Kim. “I used to call from my living room, but later I had to go high up in the mountains in the middle of the night and I was scared to talk for more than a minute or two.” Park said she used to get calls from North Korea at all times of the day and talk for long periods, but now the number of calls she receives has shrunk by approximately 60 percent since 2012.

“North Korea feels threatened by news and images of the outside world seeping into the country and now is trying to reassert its control by going after people bringing in the information,” said Robertson. “Talking on an overseas phone call, or watching a foreign television show should not be considered crimes, but the government is tightening control through repression and fear.”

More here and here. One backlash of this increased border control is a rise in cross-border violence, and more tension with China. North Korea’s border guards had come to rely on the bribes and extortion they taxed from this localized, illicit cross-border trade. With the loss of that income, the underpaid guards have turned to violent crime, and like all criminals, they go where the money is. China has since raised militias to patrol the border regions, and North Korea has purged an official of the Supreme Guard Command as punishment for the violence. There were also purges at the local level.

There is a very important point here, one that makes Kim Jong Un’s diplomatic outreach completely consistent with his isolationism: it costs money to pay border guards, buy cell phone trackers, and isolate the people you consider “wavering” or “hostile.” North Korea earns that money by extracting aid from foreign sources, and through its officially sanctioned trade relationships. Here is another way that sanctioning the regime can actually open North Korea to outside trade and influence.

~   ~   ~
These reports paint a picture of a regime that is struggling to maintain its financial links to the outside world, while severing the economic, social, and cultural links between its people and the outside world. If a less isolated, less hungry, less brutal, and less provocative North Korea is in our interests, then our obvious policy response is to undermine both aspects of that policy — to facilitate illicit cross-border flows of information, people, money, and goods, while cutting Pyongyang’s hard currency flows.

The first part of this strategy is the more difficult one. Some of it can be done through broadcasting, some requires creative technological thinking, and some will require clandestine operations.

The second part is about sanctions enforcement, which requires financial intelligence, legal tools, effective diplomacy, and political will.

The reports of defections by North Korean financiers suggest a potential windfall of financial intelligence. Each of these men, and each of their laptops, represents a potential Rosetta Stone. I certainly hope some of them have found safety in the care of U.S. and South Korean intelligence agents. I’ll also express my hope that The Guardian and Al-Jazeera will refrain from getting them — and their entire families — killed, by printing their names.

The Obama Administration will also have to find the political will to dissuade South Korea and Japan from subsidizing Pyongyang and loosening their own sanctions. It will have to find the political will to threaten secondary sanctions against the Chinese and Russian interests that prop Pyongyang up. Lacking this, the administration’s policy will continue to fail. My guesses are (respectively) that it won’t, it won’t, and so it will. North Korea’s hostage-taking, threats, and inducements will recoup more modest financial benefits for the regime. That’s about all Pyongyang needs to undermine the effect of U.N. sanctions, and to sustain its provocative and repressive ways.

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I wonder how Air Koryo serves them their macadamia nuts (answer: very carefully)

Not only are the sons and daughters of North Korea’s highest-ranked elite wielding influence outside the sphere of leader Kim Jong Un  – they are also displaying it in public, a news outlet run by a high-profile defector said Tuesday.

The people mentioned in the report have access to external trade and foreign currency and many officials bring money to secure an audience with them. They appear untouchable by law, the report said, even though political factions can be gravely punished in North Korea. [….]

North Korea observers say children of the elite in Pyongyang often enjoy special rights and in the past fought among themselves to wrest control away from each other. Some say that the number of businesspeople is on the rise in recent years, thanks to a looser grip on the flow of money and information than under Mr. Kim’s father, who died in 2011. [Wall Street Journal, via New Focus, in Korean]

They sound like the sort of entitled arrivistes who would embrace the profitable aspects of engagement, yet who would also have every reason to ensure that engagement didn’t change the system that enriched them.

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And now, a brief Marxist-style criticism of North Korea’s class struggle and internal contradictions (Updated)

Yonhap reports that North Korea has cut its grain imports from China by more than in half in the first quarter of this year “due to an increase in the country’s grain production last year.” A fall in market prices for corn corroborates that there is a greater supply of corn than usual; ordinarily, spring is the leanest time of year for poor North Koreans.

Despite Pyongyang’s decision to buy and import less grain, the World Food Program, which recently found that 84% of North Korean households have borderline or poor food consumption, continues to ask foreign donors to contribute $200 million to a program intended to feed the people Kim Jong Un won’t. (Humanitarian aid accounted for 95% of U.S. exports to North Korea, which also rose sharply last year.) So, either the WFP is overestimating hunger and should reevaluate its aid programs, or Pyongyang is accepting — and gaming — international aid to allow it to fund other priorities (an allegation that has been made before by others, here). It’s also possible that both alternatives are true.

Just in case you’re tempted to say that the drop in food imports means China is cracking down on North Korea, trade statistics released earlier this month by the Korea International Trade Association show that “North Korea exported 16.5 million tons of anthracite [coal] to China in 2013 … a year-on-year increase of 39.7%. Those exports earned Pyongyang “approximately US$ 1.373bn, a 15.5% increase over 2012.” Yonhap also reports, however, that starting in January, Pyongyang “significantly stepped up checks on its coal exports to China,” a development that’s said to be related to the purge of Jang Song Taek, who was accused of selling off North Korea’s resources too cheaply. We’ll soon see if second-quarter figures show any decrease, or whether this is just ChiCom disinformation.

Partially as a result of this, North Korea’s GDP grew by nearly 5% last year, according to the Hyundai Research Institute. Some of that money was invested in the “railroads, metal, and power generation sectors” — and yes, North Korea still has the world’s highest military spending as a percentage of GDP. The beneficiaries of this wealth do not include North Korea’s health care system, whose failure The Guardian tries to hang on sanctions, either out of bias or ignorance about the bigger picture. The data, taken with other data suggesting that North Korea recently began showing a current account surplus, hardly suggest that Pyongyang is feeling a cash squeeze. It’s just setting its own priorities, as usual.

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Who is feeling a cash squeeze, aside from the poor who can’t afford to buy food? The Outer Party elites in Pyongyang. After several months of strict enforcement, the regime has finally relaxed that order confiscating their foreign currency. According to the Daily NK, plenty of people who were terrorized by the purge of Jang Song Thaek handed over their savings out of fear that much more than their savings was at stake:

High-rise apartment buildings, streets lined with stores selling expensive products and high-end restaurants are cropping up in Pyongyang since North Korean leader Kim Jong-un focused state spending on the capital. But that modernizing drive has come at a heavy cost to the provinces, which are languishing in backwardness and poverty. 

“In December of 2011, after he just came to power, Kim Jong-un issued an order to populate Pyongyang by the end of 2012 with the cream of North Korean society in terms of political and ideological beliefs,” a source recalls. [Daily NK]

From a nominally egalitarian and Marxist perspective, Pyongyang’s confiscatory impulse is almost understandable, or at least easy to rationalize. Pyongyang residents aren’t keeping those high-end stores in business on the salaries of civil servants.

[See, AP? This reporter told us about the minders, and that this was
not a typical North Korean shopping experience. It isn’t so hard!]

In the provinces, by contrast, food rations have stopped, and officials there have to squeeze and extort the proles to survive, and prosper:

Central Party cadres dispatched to October 18th Cooperative Farm in Baekam County, Yangkang Province are drawing the ire of local residents as they prove enduringly corrupt, Daily NK has learned.

A source located in the region reported on the 22nd, “It’s the lean spring period and food is quite scarce, but these three cadres sent from Section 4 of the Central Party Agriculture Department still eat pork almost everyday. People are really unhappy. There are these kids of people who might get meat just once or twice a year out there in front of their lodgings just to smell it cooking.”

Cadres were first dispatched to the farm in 2008 to oversee the potato harvest, the source explained. In addition to having their own housekeeper, they regularly order the manager of their accommodation to purchase piglets, which they then raise.

“At a time when more and more people in the Okcheon Unit are running out of rice, the cadres can continue to live in their own world. People attack them, pointing out that ‘workers starve while the ones ordering them around are living well. They can eat till their stomachs stick out,” the source went on.

“Just last month a man in the unit starved to death,” she continued. “People say that he couldn’t harvest last autumn, so his wife went to get frozen potatoes out of the ground and tried to make a living by making food out of their skins. He passed away while his wife was left behind to try and sell what she had made.”

“When [cadres] go to Pyongyang they take a ton of potato starch with them, and tens of farmers are mobilized for the indignity of loading the freight,” she alleged. “They don’t care; they just say, ‘When going back, you shouldn’t go empty handed. If you want to get help with things like farming equipment, there’s no choice; you have to give something before you can get anything.’” [Daily NK]

The regime can confiscate away some of the more ostentatious trappings of this widening class divide, but that widening class divide is one of the distinguishing characteristics of Kim Jong Un’s North Korea, and a case of Kim leading by example. Class barriers are now so strong that it has become difficult to marry across them. According to the reports, the confiscation is concentrated around Pyongyang, where there are few low-songbun people to see that divide. The regime’s more likely motive is probably just to rake hard currency in from the Outer Party to the Inner Party.

I wonder to what extent this confiscation has driven elite money into North Korea’s housing market, which is said to have boomed right around the time the confiscation was announced (yes, it’s possible to buy land and houses in North Korea). A regime that’s sustained by money laundering must eventually produce some accomplished money-launders and tax evaders. Coinciding with this, state enterprises have begun leasing out unused land to those who can afford to lease it. If the result is more sotoji agriculture and higher food production, that would be a good thing for the people, even if that isn’t a consequence the regime had intended.

(The reverse appears to be ongoing in the border city of Sinuiju, where the regime, or perhaps corrupt regime officials, are said to be selling real estate to Chinese investors.)

Given the extent to which the elites have leveraged their status to enrich themselves through corruption and trade (legal and otherwise), one can infer that this mass confiscation raked in millions of dollars in hard currency. I hope that the cost will be paid, eventually, in lost loyalty by the elites to the regime. In the meantime, if she ever cared to do so, Hazel Smith could fill volumes with “critical” studies about the intensifying class struggle between North Korea’s Outer Party, Inner Party, Capitalist Class, and Proletariat. Here is the perfect laboratory for Marxist crisis theory, and all the critical studies journals are missing out.

Update: More related thoughts from the Daily NK, which entitles its story, “May 1st a Reminder of Class Divide,” and reports that some workers are more equal than others:

Now, May 1st serves as a clear reminder of North Korea’s widening class gap amid the increasing prominence of the market economy. 

A former worker at a foreign currency earning enterprise based in Songnim, North Hwanghae Province explained to Daily NK, “A class system between workers began to form a few years ago. How one celebrates the May 1st holiday depends on their membership in either the lower or upper class, and mistrust has formed between the two.”

“State factory workers spend the day cultivating their vegetable gardens or just keeping busy at home. But workers at individually-run trading companies attend sports games put on by their employer. They even get high-end gifts like televisions and bicycles,” the defector said.

Moreover, “Even if they don’t win the game the employees still get a new set of underclothes, and this makes the state workers quite envious.  Now even children belong to a class based solely on the occupation of their parents.”

A former manager of a commercial enterprise management office in North Pyongan Province added, “The state workers really have a rough time in comparison.  Many of them can’t even get one bottle of alcohol.”

The story reports that factory workers, once glorified as pioneers of the workers’ paradise, no longer bring home income or rations, and are looked at as incompetent providers in their own homes. That must be a source of deep resentment in the factory towns int he provinces.

Speaking of those high-end gifts, we have fresh information about their origin:

North Korea increased imports of vehicles and alcoholic beverages from Hong Kong in 2013, despite an overall drop in bilateral trade, a South Korean report showed Thursday.

The trade representative office for Korea Trade-Investment Promotion Agency (KOTRA) in Hong Kong said Pyongyang spent US$4.36 million to buy vehicles, up 27.5 percent from the year before, a large number of them with over 3-liter engine and seating capacity for more than 10 people.

Cars were the second-largest single product imported by North Korea from Hong Kong after electronic components, the office said.

“The cars were made in other countries and shipped through Hong Kong,” it said.

North Korean imports of alcoholic beverages shot up 51.3 percent last year from 2012, with whiskey and vodka making up the bulk of products shipped. Though liquor products only accounted for 1.4 percent of goods shipped from the former British colony to Pyongyang, its annual growth rate surpassed that of all others last year.

This trend continued into 2014, with North Korea’s purchase of alcoholic beverages soaring 758.8 percent in January and February vis-a-vis the previous year, according to the KOTRA office.

The latest report showed that two-way trade dropped 57.2 percent on-year to $26.99 million, with Hong Kong’s exports falling 53.7 percent. It said no crude oil, grain and fertilizers were shipped to the North. [Yonhap]

Most of these items are what U.N. Security Council sanctions resolutions refer to as “luxury items,” and ban North Korea from importing. This is just more evidence of China’s disregard for and non-enforcement of those resolutions. If the Obama Administration is serious about enforcement, it would identify the companies in Hong Kong involved in this trade, leak the names of their banks, and identify a few good targets for a first round of sanctions that would block them out of the dollar system.

And not for nothing, but the U.N. Development Program, whose work in North Korea was the subject of a major diversion scandal a few years ago, is now allocating another $2 million “for projects to help ease energy and food shortages in North Korea.” Lest any apparatchik lack for gas for his new Benz.

If ever a country screamed for class warfare, North Korea is that country.

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All Animals Are Equal, But Some Are More Equal Than Others

Because under capitalism, man exploits man. But in the Workers’ Paradise, it’s exactly the opposite!

Affluent households get children from the lower classes to repair fences, harvest crops, produce charcoal briquettes and perform other household chores. For poor children, it serves as a good opportunity to get fed somewhat well.

The trend is even clearer in rural areas; wealthy families ask children from poor families to cultivate their private fields, sowing them in spring and harvesting the crops in fall in return for feeding them.

If they employed adults, they’d have to pay them in money, but they can use these poor children in exchange for food alone. [Daily NK]

There are times when I can’t tell whether North Korea was modeled on the works of George Orwell or Dr. Seuss. Either way, someone should tell Christine Ahn.

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