Are Kim Jong-un’s apologists in U.N. aid agencies doing North Koreans more harm than good?

With a government in control, it is impossible to reach those who are powerless without paying the powerful, and paying the President and the government will make them less interested in listening to their people. Instead of having to raise money through taxation and deliver services in return, they can instead use their people to extract money from donors. They can enrich themselves by keeping their population poor; such aid is an instrument of inequality. – Nobel Prize winning economist Angus Deaton

In February 2015, the United Nations Panel of Experts monitoring compliance with the U.N.’s sanctions against North Korea released a report that should have made headlines around the world. Buried near the end of that lengthy report was a finding that North Korea’s Reconnaissance General Bureau, or RGB, had placed two agents inside U.N. agencies — one in UNESCO, and one within the World Food Program’s Rome office. The RGB is the agency responsible for North Korea’s foreign intelligence and terrorism, and it has since been sanctioned by the U.N. Security Council (Annex II, Item 11). But instead of attracting global outrage and audits, the report passed almost completely unmentioned by the international media. I’ve yet to see a single media report suggesting that the WFP or the U.N. conducted an audit to identify any other spies in its organizations, or that they took any remedial action to expel those who were identified.

If journalists overlooked this story out of sympathy for the WFP’s good intentions, that is understandable. But if they’d instead tried to serve the greater humanitarian good of the people of North Korea, they’d have given that story a thorough enough airing to stimulate a review of the U.N.’s humanitarian policies toward North Korea. Those policies have failed, are adrift, and increasingly work at cross purposed with the Security Council’s goal of addressing Pyongyang’s proliferation threat. After 20 years of humanitarian aid, North Korea is still in a chronic food crisis. That is unprecedented for an industrialized, literate society in a temperate zone — especially one that has more than enough cash to feed every last hungry North Korean. The time has come to question the reasons for this.

Why would North Korean spies make the WFP a priority target for foreign intelligence operations? Sadly, because aid agencies and NGOs have become effective shields for the North Korean regime against criticism, sanctions, and pressure to reform. Specifically, because stories like this one are inestimable propaganda gifts to Pyongyang in its race to reach nuclear breakout before sanctions can stop it:

A United Nations agency almost halved its budget for medical assistance and childcare projects in North Korea, a U.S. based media outlet reported Saturday.

According to the Voice of America (VOA), the United Nations International Children’s Emergency Fund (UNICEF) has earmarked a total of US$71 million for such projects during the 2017-2021 period, sharply cut from the $120 million set up for the 2011-2015 period.

The sharp reduction in the budget for North Korea-related humanitarian projects came as a result of international sanctions against the communist state.

Also, a food shortage, coupled with natural disasters, were cited as key reasons for the budget cut, the report said. [Yonhap]

Similarly, this Kyodo report generated the UPI headline, “North Korea sanctions hampering aid from U.N. agencies.” Unfortunately, there is no report on UNICEF’s web site that would allow me to parse any of this to say whether the headlines are exaggerated. Instead, what we appear to have is a politically motivated whispering campaign by anonymous aid workers. 

It’s hard to overstate the value that headlines like these hold for North Korean regime propaganda if they give ammunition to its apologists and persuade U.N. member states to relax their enforcement of international sanctions. Under Kim Jong-un’s byungjin policy, the regime is pursuing both nuclear weapons development and economic development at the same time. Sanctions are intended to disrupt nuclear development and force Kim Jong-un to choose nukes or economic development. Thus, the aid agencies’ complaints play directly into his hands by weakening member states’ will to enforce sanctions.

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My first problem with UNICEF’s claims is that they almost certainly aren’t true. My second and greater problem is that the aid agencies, by mischaracterizing the actual causes of hunger, and by shielding Kim Jong-un from criticism over the very policies that cause hunger, may be doing the North Korean people more long-term harm than short-term good.

First, North Korea should not need food aid at all. Its annual spending on imported luxury goods alone is six times what the WFP spends to sustain its North Korea aid programs each year. Without the much higher cost of WFP labor and overhead, Pyongyang could meet the needs of its population for a relative pittance. As Marcus Noland has said, North Korea could close its food gap “for something in the order of $8-19m — less than 0.2% of national income or one per cent of the military budget.” This is also a small fraction of what Kim Jong-un spends on missiles, a new airport terminal, a futsal stadium, a waterpark, a ski resort, a 3-D cinema, or several yachts. The same could be said for North Korea’s spending on its military and vanity projects for its dictators, while millions starved in the 1990s. This, more than anything, may explain why aid donors have given up on North Korea. If the U.N. wants to make more money available for the North Korean people, it can require U.N. member states to freeze Kim Jong-un’s bank accounts and make that money available to buy food and medicine.

Second, North Koreans primarily rely on markets, not the rationing system or the U.N. aid that operates within that system. A new Reuters report reaffirms that markets have continued to provide for most North Koreans’ nutritional needs, and food prices have remained stable since sanctions were increased this year. Whatever the prices may be in the markets, the regime’s market policies only tell part of the story, because markets mean nothing if there’s no food to buy in them. There is evidence that the regime disrupted markets before the recent party congress. Since Kim Jong-un came to power, it has cracked down on cross-border smuggling and private agriculture, which are both essential parts of the gray market economy that feeds most North Koreans. Rather than carrying out promised agricultural reforms, it continues a broadly confiscatory agricultural policy by seizing most of what farmers grow.

Third, as Reuters affirms, and as I’ve tracked carefully since the U.N. increased sanctions in March, the evidence does not support UNICEF’s alarmist claims that hunger has increased recently. The Daily NK reports only slight rises in commodity prices, consistent with yearly trends. See also this post from Benjamin Katzeff Silberstein. (Another report from UPI, that hunger is again widespread in South Hwanghae, also the origin of famine reports in 2012 and 2013, is an outlier. In any case, the report attributes hunger there to the use of agricultural “reforms” to justify crop seizures by the military). Yes, North Korea continues to have a long-term hunger problem that affects a majority of its people, but recently, food prices are relatively stable.

In fact, I can cite some evidence that sanctions have increased the availability of energy and food inside North Korea. For reasons that aren’t completely clear, they have caused North Korean traders to shift from sanctioned trade to the trade in food, which is not sanctioned. Other reports suggest that a private pork production industry has quietly flourished in North Korea; unfortunately, much of the pork is exported to China. Sanctions have also disrupted Pyongyang’s exports of coal and luxury foods, such as seafood, which it sells to China to raise hard currency. Yet even when the aid agencies cry out for donations, the government in Pyongyang cuts back on its food imports. Is it any wonder that, no matter what the weather does, North Korea always seems to be having a food crisis? We give Pyongyang far too little credit for the control it exercises over North Korea’s food supply.

Fourth, the trade in food is not sanctioned. Both UNSCR 2270 and the U.S. sanctions law signed by President Obama in February are replete with exemptions to avoid impacting North Korea’s food supply. Perhaps some of that trade should be sanctioned — after all, why is a regime that accepts food aid exporting food for cash that it isn’t using to feed its population?

Fifth, although aid agencies claim that financial sanctions have affected aid agencies’ ability to send funds into North Korea by scaring away banks, the agencies have made this claim for years, and it’s also a problem of Pyongyang’s own making. That’s only a problem because Pyongyang makes aid agencies use the same banks — such as the Foreign Trade Bank, which “North Korea uses … to facilitate transactions on behalf of actors linked to its proliferation network” — to handle proliferation- and aid-related transactions. Congress offered a solution to this problem in section 208(d) of its new sanctions law, allowing a responsible foreign bank to be licensed to handle humanitarian transactions. In response to inquiries from the U.N., I’ve even pointed that provision out, along with the general licenses exempting humanitarian transactions, and urged the U.N. to work with Treasury to implement those exemptions.

My owb fear is closer to the opposite: I’m not convinced that banks in China and Russia have frozen the North Korean accounts that should be frozen. Despite some isolated reports suggesting that some accounts have been blocked, and that some regime agents are short of cash, there is no evidence yet to suggest that Pyongyang is experiencing a general liquidity crisis it should be feeling by now. Such a crisis might have secondary effects on food imports — if there are any — that we should be ready to mitigate with aid. But why do aid agencies need to engage in financial transactions with Pyongyang at all? For one thing, because Pyongyang forces U.N. aid agencies to use the same banks it uses for proliferation financing. For another, because Pyongyang charges U.N. agencies hard currency to pay for labor, storage, fuel, and transportation, almost certainly at inflated prices. In other words, a government that routinely mobilizes the military to build dams, ski resorts, and apartment complexes is unwilling to store, guard, and ship food for the North Korean people without being paid to do so in cash.

You won’t hear U.N. aid agencies calling for these things, or for the reforms North Korea really needs, because aid agencies are intimidated into selective silence by the fear of being expelled from North Korea, just like it recently expelled the country directors of Welthungerhilfe and Wheat Mission Ministries. That’s why it blames weather and sanctions for hunger that is caused by — and this is really beyond question after 20 years — the policies of the North Korean government itself, despite knowing full well where the blame should lie.

Want to end hunger in North Korea? It could be done in a few months with a few simple policy changes in Pyongyang. Tell Kim Jong-un to reallocate a measly 1% of his military budget to feed his people. Tell him to stop seizing private farm plots and the crops people grow on the. Tell him to ease his restrictions on cross-border trade, including by people who can’t afford to grease border guards and customs officials. Tell him to stop exporting food for cash instead of using it to feed the people Tell him to carry out the agricultural reforms it promised four years ago and never delivered. Better yet, tell it to carry out meaningful land reform — to give the land back to the people who till it, and let them sell what they grow. Tell him to stop using food as a weapon to keep the low-songbun classes under control. Tell him to stop using his own hungry people as human shields against sanctions.

I’ve yet to hear a single U.N. official say these things. Worse, I’ve yet to see a single journalist call the U.N. out for not saying them. Until they tell the truth about why North Koreans are really going hungry, U.N. aid programs will continue to fail to solve North Korea’s long-term food crisis. The wider the gap between U.N. aid policy and North Korea’s reality, the more donors will dismiss aid agency officials as well-meaning but useful idiots who are prolonging, rather than addressing, North Korea’s hunger problem. The important interests in assisting the North Korean people don’t have to conflict with the important interest in preventing Kim Jong-un from reaching nuclear breakout. The longer U.N. organs work at cross purposes, the more people will read “United Nations” as an oxymoron.