MUST READ: WaPo Predicts Food Situation Will Pressure Kim Jong Il (Updated and bumped)

The Washington Post is the latest news source to note the deterioration of North Korea’s food situation.  The  Post suggests that  this time could be different from the Great Famine, when millions died quietly. 

A grim rite of spring in Northeast Asia is the calculation of how many North Koreans could starve before the fall harvest — and what the neighbors are willing to do about it.  This year, though, the famine bailout season is more urgent, more complicated and more politically explosive than at any time since the mid-1990s, when millions starved behind North Korea’s closed borders. 

Severe crop failure in the North, surging global prices for food and tougher behavior by donors, particularly South Korea and China, are putting unaccustomed pressure on Kim Jong Il’s dysfunctional communist state. 

“For Kim Jong Il, this will be his most difficult year,” predicts Park Syung-je, a scholar at the Asia Strategy Institute in Seoul, referring to the North’s dictator. “North Korea does not have much choice for food.”  [Washington Post, Blaine Harden]

The entire piece, as I noted in the original place-holder post, is a must-read.  If its analysis is accurate, one could reasonably conclude from  it that the regime probably won’t last through the end of 2009.   Much of  its analysis is solid and plausible, and Harden’s piece  convincingly suggests that Kim Jong Il  is headed for a rough patch.  This is the last thing Kim needs  while he’s purging  his more  corrupt officials and possibly  mulling an end to the “military first” policy.

Harden’s analysis also  has some weaknesses.  It does not  make a case that  starving and weakened people are more, rather than less, likely to rebel, and the very different political implications of different “classes” going hungry.  Harden does not draw a clear enough  distinction between hardship for ordinary North Koreans (who are expendable, but  increasingly adaptable) and hardship for the elite (who are neither of those things).  We can further  classify the North Korean population  today  into  three  semi-distinct groups:   an elite class, the 10-20% who always have enough to eat because the government prioritizes  providing for them; a market class, a group of unknown size that mostly  survives by trading and sometimes has enough to eat; and  an expendable  class  that  has no choice but to depend on  an insufficient state ration  and seldom has enough to eat. 

The distinction matters.  If  the dependent class  starves, as it has for more than a decade, the regime will survive.  If the elite class  begins to starve, some people  with guns are going to  lose  their chairs at the banquet table.  The market class, North Korea’s nascent bourgeoisie,  is the key question.  How many of them are there?  How much wealth have they accumulated?  How resilient  are their supply chains?   How much political consciousness have they developed? 

In the end, I will conclude that the dispositive answers to those questions are still unknown, but my hope is that by reading this, you’ll at least gain a better understanding of the  politics and economics of food in North Korea, enough for you to draw your own conclusions. 

MORE  HUNGER,  LESS FAMINE?

As Good Friends and the Daily NK have already told us, it’s already looking like a hard year for the have-nots of  North Korea.  The  Post  posits that  it  won’t be as bad for them as it was in  1994,  and that it might be much worse for Kim Jong Il.  The Post attributes both of  those mutually contradictory trends to a single factor:  markets.

The threat of a calamitous 1990s-style famine has fallen substantially because of the emergence of grass-roots private markets across North Korea and a U.N. system for nutrition monitoring. Still, large numbers of people stand to suffer severe hardship, although probably not death, joining the ranks of the millions of North Koreans who go hungry even when harvests are good and food aid arrives.

Or, from  North Korea’s genetically selected classes of have-nots, a new capitalist class has emerged, one whose market-based  food supply may now be more resilient than the government distribution system that feeds the “haves.”  As one North Korean put it, “Those who could not trade are long dead.”

Behind its closed borders, the country has undergone a fundamental change. Analysts say North Korea now has two economies: the crumbling state system, which often fails to pay salaries and supply food, and a growing network of neighborhood markets, where people buy and sell, free of government controls. Kim’s government grudgingly tolerates these places.

This  “two economies” theory should  sound familiar.   The regime can’t provide for everyone, so it chooses to provide for a  trusted few and lets the expendables fend for themselves at markets the regime tolerates, except when it doesn’t. 

If the two economies are  related yet distinct, it’s also appropriate  to analyze those economies  separately.  After all,  declining domestic production and declining imports would probably have very different effects on the the state economy and the  market economy.  Domestic production must pass through many hands, so farmers and local officials have more chances to skim it and sell it in markets.  Presumably, bulk imports stay under the control of senior regime officials who can easily divert entire shipments for the use of the state.  Still, some leakage is inevitable:

In the markets — despite periodic police raids and crackdowns — euros and dollars can buy Chinese gadgets and clothes. Local and imported food is also available for purchase or barter and would no doubt increase, arriving illegally if necessary, in response to a sudden spike in demand.

“You will never see mass starvation again,” said Lee Seung-yong, secretary general of Good Friends, a Seoul-based charity with contacts across the North. “Except for some isolated areas, people have found ways to survive. They know they cannot depend on the government.”

In their landmark book, “Famine in North Korea,” Marcus Noland and Stephan Haggard document the development of markets in North  Korea.  This trend is  sometimes confused  with regime-directed reform, but Noland and Haggard argue persuasively that hungry people built the  markets despite the regime’s efforts to shut them down,  from the bottom up.  The regime tolerated markets to the extent that  it couldn’t  contain them.   By 2005,  when it felt strong enough to do so, it  cracked down on the markets  and tried, unsuccessfully,  to  reconstitute  the centralized food distribution system. 

(Harden also credits improved U.N. monitoring for reducing the danger of famine, but I couldn’t agree less.   In 2005, the North Korean regime  sent most  World Food Program  workers packing  and unilaterally slashed  the number of aid recipients by about 70%, from 6.5 million to 1.9 million.  As a WFP official put it, “They don’t like our monitoring,” so Pyongyang instead demanded unmonitorable “development” aid, which few donors were willing to provide.  Of the 1.9 million intended recipients on the newly shortened list, Reuters reported at the end of 2006 that the WFP could only raise enough donations to feed 700,000. So within a year of Kim Jong Il’s rejection of most monitored WFP aid, the WFP was feeding just over ten percent as many North Koreans as it fed in the summer of 2005.  The WFP’s monitoring was poor in 2005,  and it’s much worse now.)

REDUCED DOMESTIC SUPPLY

This year is anything but good. Floods last August ruined part of the main yearly harvest, creating a 25 percent shortfall in the food supply and putting 6 million people in need, according to the U.N. World Food Program.

Over the winter, drought damaged the wheat and barley crop, according to a recent report in the official North Korean media. That crop normally tides people over during the summer “lean season” until the fall harvest.

North Korea’s ability to buy food, meanwhile, has plunged, as the cost of rice and wheat on the global market has jumped to record highs, up 50 percent in the past six months.  (emphasis mine)

The projected decline in both domestic and international food supplies is much greater this year than in previous years; still,  it can be  difficult to tell which  warnings are true and which ones are manipulated  by the regime to attract donations.   

Roughly a third of children and mothers are malnourished, according to a recent U.N. study. The average 8-year-old in the North is seven inches shorter and 20 pounds lighter than a South Korean child of the same age.

This year is anything but good. Floods last August ruined part of the main yearly harvest, creating a 25 percent shortfall in the food supply and putting 6 million people in need, according to the U.N. World Food Program.

That’s not news.   In 2004, the World Food Program told us that it  was feeding 6.5 million North Koreans.  In 2006, 37% of North Korean kids were malnourished and 7% were starving.  And although empirical comparisons are probably impossible, we’ve been hearing for years about  how much shorter North Koreans are than South Koreans. 

And as  Harden notes,  famine warnings are a perennial  event in North Korea.  A  year ago  yesterday,  NGO’s were  warning us of a famine  and  blamed all of the same factors except  the weather, which seems to be exceptionally bad every year in North Korea.  The floods of 2007 were bad, but  so were the floods of 2006, which were reported to have left over 50,000 people dead or missing.  The floods of 2005 didn’t prevent what passes for a  “good” harvest in North Korea —  a lower-than-usual food deficit.   There were terrible floods in 2004.  The regime claimed these “affected” nearly half a million people and damaged 20% of the rice crop.  There was “cold and rainy weather” in 2003.  The regime blamed drought, floods, and tidal waves for the  Great Famine of the 1990’s.  I could go on.

Really, North Korea hasn’t been self-sufficient in food since before the famine, and even then,  it  depended on massive Soviet aid.  Harvests recovered modestly  between 1998 and  2005, but  never to anywhere near the level of self-sufficiency.  Since 2006,  when North Korea’s harvest fell a million tonnes short of its needs, harvests have been falling again.  This year’s shortfall will be 1.4 million tonnes.

What does this mean?  While  most of the  evidence does show that  crop yields  are much  lower than they’ve been in the past, most estimates of how much lower probably rely on the regime’s own statistics and are therefore suspect. 

But beyond supply, there is the more important question of distribution, and  any understanding of distribution is obscured by unknowable facts and greatly complicated by the death and transfiguration of the “peoples’ economy.” 

Here, it’s important to understand something of  how North Korea’s agricultural system works.  The regime sets annual production quotas and decides how much food  farmers and cooperatives  can keep.  During the famine, farmers  learned to  pre-harvest food, keep illegal private plots,  or  skim  from  their  yields before giving their shares to the state, whose officials  were also skimming.  Not surpisingly, communes and counties weren’t meeting their quotas.  Perhaps to make up for production shortfalls elsewhere, the regime  is now  enforcing food “debts” against northeastern farmers who  don’t meet  their quotas.  As a result, refugee women are selling themselves into slavery to repay those food  debts.  One can imagine what the penalty for defaulting on those debts  must be.

If this year’s food situation will be significantly  worse than  previous years,  it is plausible that  markets will improve distribution enough to  prevent famine?  With less food to go around and about as many people bidding for it,  doesn’t something have to give?  If supply can’t  chase demand across North Korea’s borders, and if  not all North Koreans are equally able to pay for food, you have the makings of a zero-sum  bidding war with real casualties.  In the past, the regime “triaged” the food supply, diverting most of it core areas around Pyongyang, and thereby forcing people in other regions to learn to adapt.  The regime doesn’t seem to have lost its ability to triage.  The areas near Pyongyang were the worst hit by last year’s floods, yet while those areas may have experienced some supply problems, it’s still the remote northeastern provinces — the ones the floods did not hit — that are suffering the most.  Clearly, we have more than a simple supply problem.   

What  are we to make of this?   If the regime can still divert food from the disfavored to the favored, the decline in domestic production  will only mean  more misery for the disfavored.  Some of  North Koreans  have learned to trade and will still be able to buy food when prices rise.  Some may even have access to food supplies (from private plots, pre-harvesting,  or  smuggled food  imports) that don’t appear in the official statistics.  Others won’t, which means  North Korea will go on  gradually culling the disadvantaged and the vulnerable:  kids in orphanages, hospital patients, concentration camp prisoners, the sick and injured, and those who suddenly lose their providers or their livelihoods.  Those aren’t the sorts of tragedies that destabilize societies, and their deaths are easily hidden.

REDUCED EXTERNAL SUPPLY

North Korea’s ability to buy food, meanwhile, has plunged, as the cost of rice and wheat on the global market has jumped to record highs, up 50 percent in the past six months.  Equally important for North Korea, its reliably generous neighbors seem to be operating under new, less tolerant rules for charity.

A  reduction in food imports may have a very different effect from lower domestic production.   Imports are much easier to divert and  tend to be of higher quality than domestic produce.  Most food imports, particularly  unmonitored shipments  from China, South Korea, and commercial sources, probably  go directly to the elite and the military.  If that’s so, those groups will be most  affected by a decline in food imports. 

The regime’s own behavior caused most of the decline in aid, beginning with its notorious diversion of international aid  and its indefensible decision to  cut off the WFP aid that once fed one-third of its people.  Up to  this time, the United States had been the primary donor to WFP’s North Korea feeding programs, but then, the U.S. contribution dropped off sharply.  The Post  attributes the U.S. aid reduction on the North’s nuclear test:

[North Korea’s nuclear test] also brought on a drastic reduction in the willingness of the United States and much of the rest of the world to give food to North Korea.  Total donations under a World Food Program project declined by more than 80 percent between 2005 and 2007, and U.S. donations fell to zero.

This is  off the mark.   The U.S. government decided  to cut in its  aid to North Korea  in  the fall  of 2005, a year before North Korea’s October  2006 nuclear test.   The cut was announced by Andrew Natsios, then the head of USAID,  in reaction to  North Korea’s demand for unmonitorable “development aid.”   Natsios, the author of “The Great North Korean Famine,” had been an aid worker in  North Korea and is a strong proponent of coordinated aid policies that demand transparent monitoring of aid to ensure fair distribution.

For nearly a decade, South Korea had led the world in providing assistance to the North, while setting almost no conditions on aid and asking few questions about who was getting it.

But South Korea’s new president, Lee Myung-bak, wants to condition some of his country’s gifts of food and fertilizer on progress in removing nuclear weapons from the North, on improvements in human rights and on guarantees that food will go to poor people, not to the North Korean military.

While South Korea will probably end up providing some aid without conditions, a long and politicized debate in Seoul about how much to give and under what conditions is delaying delivery.

The regime’s  own belligerence also contributed to the electoral  defeat of a South Korean government that had given the North Korean regime billions in unconditional aid.  How firm the South Koreans will be is still undetermined, but as North Korea refuses to disclose its nuclear programs as agreed, South Korea is taking its time providing fertilizer  to the  North.  That means next fall’s yields may also be low. 

[…] China, the North’s closest ally and main trading partner, also seems to be stiffening its food policies.  It has quietly slashed food aid to North Korea, according to figures compiled by the World Food Program. Deliveries plummeted from 440,000 metric tons in 2005 to 207,000 tons in 2006. Last year there was a slight increase in aid, but it remained far below the levels of the past decade.  [….]  

China also appears to have tightened its food squeeze on North Korea for domestic reasons. In order to meet local demand and control inflation, Beijing slapped a 22 percent tariff on grain exports to the North.  China is by far the country’s major source of food imports, and the tariffs have resulted in higher prices and less grain in markets across North Korea, according to several aid groups.

The Post and Andrei Lankov suggest that China is punishing North Korea for testing a nuclear weapons.  I disagree.  As the Post notes, China modestly increased aid in 2007.   China may  not like the fact that North Korea’s nuclear test is incentivizing Japan’s rearmament, but China  also  sees a nuclear North Korea  as a useful distraction for  U.S. power in a zero-sum  competition with America.

If China is in fact reducing food shipments to North Korea, a more plausible explanation has to do with simple economics.  China doesn’t want  its people to grow restive over  high food costs,  shrinking food supplies,  or  inflation, so it’s reducing exports to keep domestic prices low.  I agree with Lankov, however, that China would probably rush food to North Korea to prevent a famine or a refugee exodus before the Olympics.

Finally, a global rise in  food prices and a falling dollar mean that donors will have to raise more money to provide the same amount of aid.  That also means that the regime will pay more for  the food it  buys and imports  to feed  its elite.

POLITICAL IMPLICATIONS

But while famine is much less likely than in the 1990s, so is loyal public tolerance of food shortages, analysts and aid officials say.  These experts agree that cynicism and restiveness have increased because of the highly visible failings of Kim’s government, the willingness of poorly paid police to take bribes and the now-proven ability of markets to deliver food and other goods that the state cannot provide.

“There is a small but growing potential of rebellion if the food supply dries up — and Kim’s government knows it,” said Lankov, echoing several other analysts and aid experts.  All this could make the coming summer a test of Kim’s ability to procure food and keep the lid on inside North Korea while maintaining good relations with his most important patron, China.

The regime’s control over  the people does seem to be slipping, and that poses a mortal threat to its survival.  But how will lower food supplies affect those trends? 

If  the regime loses its  battle to regain control over the supply of food, it also loses control over the people who no longer depend on the regime for their survival.  Many  sought economic independence as if their lives depended on it.   Hundreds of thousands of  North Koreans who  fled to China to survive saw the fraudulence of the regime’s claims  that it has  made them prosperous.  In spite of the regime’s best efforts to sever them, economic links to the outside world have  introduced forbidden  cultural links.  Some see  those links are an existential threat to the regime’s survival.   Meanwhile,  the old redistributionist economy  ceased to provide for many North Koreans  years ago and is still crumbling.   Many North Koreans today show signs of  being disillusioned with the regime. 

On the other hand,  there are almost no historical examples of revolutions triggered by famine.  Starving people don’t rebel.   Angry people rebel, especially envious people.  If North Korea’s have-nots can still obtain their survival ration in the marketplace, there’s plenty of reason for class envy, and misery that does not sap their energy will be destabilizing.  And there will be moments of danger for the regime  if hungry people see that food is being withheld from them in markets, warehouses, or stores.  But if the elite still has the coercive and economic power to outbid the have-nots and divert their food supplies, then hunger could actually stabilize the regime in the same terrible way it did in the 1990’s.

If the markets are as influential as the  Harden suggests, then much of this will  come down to money.  The regime and the elite will need plenty of it to brace themselves for a bidding war over a limited supply of food — provided they have enough of it to stay unified.   That’s why  the regime is especially vulnerable to economic pressure today, and it’s also why other nations have a unique opportunity to use  targeted economic pressure to  coerce the regime into  humanitarian aid transparency  (see also Gordon Chang). 

North Korea may soon see a new round of class warfare between those who have money and guns, and those who don’t.  It would be prosaic to rule out a repeat of the terrible events of the 1990’s as long as  one side has  most of  the weapons.