Must Read: Marcus Noland Reports N. Korea “Headed Toward Outright Famine”

This is from a new paper released by the Peterson Institute for International Economics, and one of OFK’s all-time favorite North Korea experts (and have you read his book yet?):

North Korea is once again headed toward widespread food shortage, hunger, and risk of outright famine. According to Peterson Institute Senior Fellow Marcus Noland, “The country is in its most precarious situation since the end of the famine a decade ago. Calculations by Noland and Stephan Haggard, University of California, San Diego, indicate that the country’s margin of error has virtually disappeared. For technical reasons, estimates produced by the United Nations’ World Food Program and Food and Agriculture Organization (total demand) probably overstate demand implying recurrent shortages year after year (figure 1). Noland and Haggard argue that in recent years available supply has exceeded more appropriately calculated grain requirements (adjusted total demand) but that this gap has virtually disappeared. “This is a yellow light about to turn red,” says Noland.

Food prices have almost tripled in the last year, skyrocketing at a rate faster than either the overall rate of inflation or global food prices (figure 2). Anecdotal reports describe a breakdown in institutions and increasingly repressive internal behavior. Noland and Haggard forecast that the North Korean regime will ultimately weather this challenge politically by ratcheting up repression and scrambling, albeit belatedly, for foreign assistance.  [Marcus Noland]

I was fortunate enough to attend an event at the American Enterprise Institute yesterday where Noland summarized the findings in this paper.  Noland actually thinks that the U.N. Food and Agriculture Organization and the  World Food Program have overestimated North Korea’s minimum food needs by about 20%.  He showed a chart summarizing and contrasting the data on North Korea’s food needs, aid, and imports, and  declared the results to be implausible;  if WFP estimates are true, North Korea  should have been in a famine for the last several years.  This time, however, Noland thinks North Korea really does have less food supply than need, and I agree that the available evidence suggests as much.

(OFK Note: That may explain how I successfully predicted 2 out of the last 1 food crises in North Korea, and I’d previously questioned whether the  World Food Program really was feeding 6.5 million people in 2005.  After all, the loss of that “marginal subsistence” aid  didn’t trigger a famine.)

Noland thinks the Chinese should lift their restrictions on exports to North Korea, and that other nations should “inject” aid into the hungriest areas of North Korea — the northeast, mainly — with some hope that markets will distribute the food semi-efficiently.  He notes, however, that the regime continues to crack down on and repress the markets and continues to frustrate transparency and verification in food distribution.  That means that superficial castigations of stingy donors still  won’t put food into the bellies of the hungry if the regime opts to ship it all to Pyongyang anyway.  Getting food aid to those who need it will require major North Korean concessions on distribution, which means we need leverage, something that we actually have for the first time in years.

It’s also interesting that Noland seems to believe that North Korea has already experienced acts of “civil disobedience” and “unrest” over its attempts to crack down on the markets.  I assume he’s referring to this. 

Another interesting read from Peterson is this paper by Noland, Stephan  Haggard, and Yoonok Chang, the intrepid researcher who has interviewed literally thousands of North Korean defectors/refugees in China.  A summary:

Results from a survey of more than 1,300 North Korean refugees in China provide insight into changing economic conditions in North Korea. There is modest evidence of slightly more positive assessments among those who exited the country following the initiation of reforms in 2002. Education breeds skepticism; higher levels of education were associated with more negative perceptions of economic conditions and reform efforts. Other demographic markers such as gender or provincial origin are not robustly correlated with attitudes. Instead, personal experiences appear to be central: A significant number of the respondents were unaware of the humanitarian aid program and the ones who knew of it almost universally did not believe that they were beneficiaries. This group’s evaluation of the regime, its intentions, and accomplishments is overwhelmingly negative–even more so than those of respondents who report having had experienced incarceration in political detention facilities–and attests to the powerful role that the famine experience continues to play in the political economy of the country.  [Peterson Institute Working Paper Summary]

Read the whole thing here.