A Capitalist in North Korea: My Seven Years in the Hermit Kingdom

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A Capitalist in North Korea: My Seven Years in the Hermit Kingdom Page 17

by Felix Abt


  However, opponents of the regime cannot admit that people are not starving or report about (however marginal) improvement of the food situation, since, as I have said, from their viewpoint nothing can possibly improve in North Korea. At the same time, supporters of the regime will not admit that the North Korean people are still malnourished, and the regime itself is active in presenting exaggerated evidence of a looming famine (or perhaps, even fabricating such evidence when necessary) - as this will help it get more free food from the outside, and this is what Pyongyang needs.”

  This is an extract from the article “It’s not all doom and gloom in Pyongyang” by Andrei Lankov in Asia Times Online, www.atimes.com, dated September 23, 2011. Professor Lankov is Russian scholar of Asia and a specialist in Korean studies who is very critical of the North Korean regime. He is a fluent Korean speaker and lectures at the Kookmin University in South Korea.

  I do not mean to sound like a Pollyanna on the food situation. I am merely adding nuance to the sensational reports that appear around the world.

  On the flip side, I observed no abundance of food when traveling the country, and even caught occasional glimpses of villagers picking up the scarce rice grains that had fallen out of their automobiles while being transported. I also noticed the meager diversity of food that farmers and workers were eating out of their bowls when I sat with them. While the quantities didn’t look small, they scoured down corn mixed with rice and porridge, along with some vegetables and herbs including kimchi—not the balanced diet recommended by nutritionists. A watery soup was also often part of the menu, along with potatoes and noodles made of potato starch.

  There wasn’t much meat and fish, a dearth that probably added to the malnourishment. To get at least some proteins, North Koreans compensated the lack of beef and chicken with tofu. Meat and fish were rather expensive and reserved for leaders’ birthdays and other celebrations.

  Some press accounts overlook these cultural factors when pointing out the diets of North Koreans. In 1999, The New York Times claimed, “Millions of North Koreans survive on tree bark and the husks of corn kernels and the country is getting millions of tons of emergency food aid from abroad.” While the famine was dramatic, the circumstances must have improved in the meantime as people eating edible grass, roots and herbs never came my way—as reflected in the ranking by Save the Children.

  What many outside North Korea generally ignore is that the much-quoted “foraging for food” is an age-old North and South Korean tradition, a result of the absence of arable land in the North to grow crops. For centuries, Koreans from all over the peninsula consumed wild mushrooms and edibles—long before the foundation of the DPRK—and still love to eat them.

  Food and Juche

  Before the Cold War ended, North Koreans took pride in their egalitarian society that was, in many ways, a socialist model state where cadres from around the world studied in the 1960s and 1970s. Kim Il Sung’s North Korea came the closest among all other countries to Karl Marx’s definition of a true communist society—one in which all property is publicly owned and each person works, and is paid according to his abilities and needs.

  While some may disagree with me, it’s true that the DPRK, at the beginning, was better off than South Korea with its free housing, free education, free health-care, zero taxes and its de-monetized society. A declassified CIA country study, later published by its author Helen-Louise Hunter, revealed that North Korea was indeed pretty well-off compared to South Korea in the 1960s.

  Before the collapse of the 1990s, North Koreans were particularly proud of their Public Distribution System (PDS), an effective food rationing system that was unmatched by other socialist countries. By the mid-1950s, most other socialist countries had abandoned their food rationing systems, but North Korea unwaveringly maintained it for another 40 years.

  A look at the system can show us that it truly was Marxist, aimed at different groups according to their needs. For every working adult, the PDS provided daily rations of 600 to 900 grams worth of cereals, cabbage, soy sauce, and other goods, according to the number of calories they needed. Those who were less active and burned fewer calories, such as retirees and students, received 300 to 600 grams.

  The apparatus was not perfect, but it worked fairly well until the end of the 1970s. The draught and subsequent economic collapse of the mid-1990s dealt a major blow to the PDS, having already been weakened after the end of the Cold War. The once-socialist states of Eastern Europe broke away as its major markets and benefactors and deprived the DPRK from earning income, thanks to exports that would have allowed it to purchase foreign food, fertilizer, and machines.

  With the PDS in tatters, and with people needing to eat to survive, they took to private and illegal black markets to get their food. As the markets gained popularity, the Korean Workers’ Party reluctantly recognized their existence and started regulating them. But while the communist parties of China and Vietnam actively promoted these types of economic reforms, the North Korean authorities soon panicked. They were trying, in a very defensive way, to get private trading under as much control as possible. They didn’t want privatization to hurt the planned socialist economy that was a basis of their rule.

  In the mid-2000s, the party began its “correction” of the markets when it realized merchants veering far from the “fatherly care” of the Dear Leader. The Korean Workers’ Party issued several directives in 2007 that stated that the “markets have become a place of violation of government rules and social order,” a sort of infringement on its communist ethos.

  They alleged that “some merchants serve food and drinks, and there are customers who get heavily drunk and fall at a bus stop or a vegetable garden. …And there are those who curse, argue and fight. Such ugly behavior is just what the enemy is wishing for us.” The markets, the directive finished, “have become a place for merchants to make money by charging a lot more than they should. We should abandon such ideas as making a big profit out of business.”

  Unfortunately, foreign aid gave the repressive regime the means to halt the opening of the market. Between 2002 and 2004, an influx of food aid stabilized this sector, enough to roll back the capitalist activities which were tolerated for a few years, at least to make up for the failures of state distribution. In October 2005, the government announced that it would re-activate the PDS; it then prohibited the sale of grain in markets, forcing peddlers to sell their grain to the state at a lower fixed price.

  Thereafter, authorities issued an order barring men from selling goods at markets, because they were more able-bodied. In December 2007, women below 50 years of age were also prohibited from trading at markets, seen as the second-most active group. Some would say the decision was a mild form of ideological re-education: from that point on, all able-bodied men, along with healthy women no older than 50 years were expected to work at government factories—not “capitalist traders”.

  One day that year, I read the official explanation published in a translated decree. It explained, in a euphemistic way, that the party did not generously offer these people a good university education to become anything better than traders—an “about face” that comfortably fit crackdowns in a way that would help with its political legitimacy. Though the book Famine in North Korea: Markets, Aid, and Reform by Stephan Haggard and Marcus Noland is not free from an anti-DPRK bias, it contains information for readers interested in learning more about this.

  All this private trading gave rise to a small affluent class that I could see in my everyday life. My wife and I, like many foreigners, were happy that we could visit the Tongil (Reunification) Market in Pyongyang, the largest in town where we could buy a wide variety of fresh meat, fish, rice, vegetables and fruit—along with pretty much any household amenity. Here, we haggled next to affluent North Koreans, like the wives and children of senior officials, cadres working for foreign-trading state companies, and the growing number of private traders enriched during the past decade. I saw many from this
young consumerist class buying jewelry and clothes in expensive shops, and dining out in fine restaurants.

  Every year, for several weeks between May and June, party officials issued “rice planting battle orders,” (pictured) a euphemism intended to push workers to work at the speed of the Chollima, the speedy Korean pegasus. Workers, students and children who live nearby rush to the rice paddies to plant rice all day long. The goal is to secure a good harvest with a minimal loss. The government sometimes invites diplomats and foreign residents to “help” the farmers. In 2005, one fancy guest was the former British ambassador to the DPRK, David Arthur Slinn.

  My wife and I felt the effects of the government’s roll-back on market trading at this market. By the end of 2005, we couldn’t buy rice anymore, and the young, enthusiastic saleswomen suddenly disappeared from Tongil. Other products were still available, such as vegetable and fruit, but were losing their freshness and quantities. As a result, the state-run shops, which were less attractive to buyers, got more business that benefited state coffers. Contrary to the expectations that the government would make things cheaper, our household expenditures grew by about 50 percent thanks to these shops.

  My wife and daughter shopping in a state-run shop “naturally refrigerated” in harsh winter time during a power outage.

  Burgers, beer and colas

  Despite the bad attempts to rein in the bazaars, North Koreans deserve credit for trying to improve their economy in more sustainable ways. Many times I met, and came to respect, the long-serving DPRK ambassador to Switzerland in Geneva, Ri Chol (also known as Ri Su Yong). He was well connected in Pyongyang, but he gave off an aura of modesty, hard work, and complete dedication to improving the situation back home. He was particularly effective in his work because he knew Switzerland better than me—and was therefore one of the few North Korean cadres who understood how Westerners thought.

  Ri Chol exerted a charismatic influence on foreign business people, including most seasoned ones. In 2000, he persuaded Swiss investors to set up PyongSu, and Egyptians to set up a mobile phone company. Using his connections, the envoy bought a second-hand brewery based in England and using German equipment, a bargain that he dismantled and sent back to Pyongyang to brew the tasty Taedonggang beer.

  Although North Korea was home to several competing breweries, the Taedonggang brewery used not only German equipment but also the country’s authentic recipes. The beverage became so popular that manager Kim proudly told me, a couple of years later, that the company had reached an impressive market share of two thirds in his country.

  When a global leader in cement production, the French company Lafarge, opened shop in North Korea, he told its Swiss competitor, Holcim, to hurry for opportunities there as well. A few months later, a Holcim delegation made a confidential trip to Pyongyang, although it found the market too small for two large competitors.

  Another time, he visited a small consulting company in Switzerland specializing in power generation and grid rehabilitation. Its owner told me that he was surprised to walk into his office and, without knowing beforehand, meet an ambassador hanging out there. He told Ri: “I never expected an ambassador to visit me and I did not even put on a tie.” Ambassador Ri took his tie off and told the man: “Don’t call me ambassador, just call me Ri.” At least, that’s what the owner himself told me.

  In the foreign ministry, Ri was given the nickname “businessman” thanks to his remarkable track record. Interestingly, he wasn’t perceived as a threat to the party ideology. On the contrary, a senior official close to him admiringly revealed to me that he got the DPRK’s most prestigious recognition of a “People’s hero.” But in addition to business, the ambassador was also a visionary in economic development. According to a senior Swiss official, Ri persuaded the Swiss development agency, SDC, to help the government introduce new potato varieties that were cheap, easy to grow, nutritious and could ease food shortages in the late 1990s.

  The initiative was pretty successful: within a few years the potato harvests took off and more North Koreans had hearty meals on the table. According to the same source, he also wanted to introduce goats from Switzerland into his fatherland, because they could produce meat and dairy in a cost-effective way—helping to nourish the barren countryside.

  What the Koreans called the “Potato Revolution” since 1999 not only changed their diet, but put more food on the tables. Like most other Asians, Koreans loved their white rice with every meal. But the acreage devoted to potatoes grew significantly, in part because of newly introduced varieties. The most recently introduced “Juwel” and “Magda” seed potatoes need only a few weeks to be ready for harvesting. This restaurant in Pyongyang’s diplomatic village promoted potato dishes as “health food,” a trend that I saw around the country. The party also launched a “Juche” information campaign that elevated potatoes from a secondary food to a primary one. Potato farming provides more calories than any other crop, in terms of area farmed, and contributes more than rice to the consumers’ health. They are rich in carbohydrates, protein and vitamin C, making them an ideal source of energy.

  Something vital completely escaped the attention of Western and other foreign media obsessed with trivialities such as North Korea’s leader’s hairstyle, his shoe heels and his preferred French Cognac. Amazingly, Kim Jong Il was, unlike other Asian leaders, highly enthusiastic about potatoes and soybeans and gave them a key role in agricultural development.

  These crops, and potatoes in particular, were indeed more suited for North Korea’s climate and more nutritious than the rice so dear to Asians. Moreover, soybeans not only were an important source of protein for the North Koreans but greatly contributed to boosting organic nitrogen levels in the soil which is the most important element for plant development, in the absence of chemical fertilizer.

  Unlike cows, farmers didn’t need to feed their goats with grass and corn, the latter being a cheap staple that humans needed when food was scarce. Goats could survive on all sorts of provisions and in different environments. Most importantly, good goat species could produce 2 to 3 kilograms of milk per day or the equivalent of the minimum daily requirement of food for a family of five.

  From the late 1990s to the mid-2000s, the goat population increased from an estimated few hundred thousand to an impressive 2 million. A few hundred thousand animals were slaughtered every year, adding a substantial number of meat to the economy. With the increase of the goat population, culling them became more sustainable, even though the privileged saw a disproportionate benefit.

  Aside from the new cuisines, skins of the slaughtered goats could have eventually been made into quality soft jackets and gloves—an asset for a growing affluent class experiencing frigid winters. But the government agreed that the products would be largely exported and that the leather processing workshops and those who sold goat skins and/or tanned them would be the main beneficiaries from the sales proceeds. My wife, who was once the right hand of the Italian manager of a luxury leather factory in Hanoi, found out about this opportunity when she was hired by the Swiss Development Agency (SDC) as a consultant.

  The state tannery was ill-equipped to turn the skins into decent leather, so she traveled across the Chinese border to find shops that could handle the task at low prices. In North Korea, she hoped to help launch workshops with little investment—meaning they had sewing machines without electricity. She also planned to bring in Vietnamese leather specialists, who have built their expertise from the country’s booming garment and leather industry, to train the North Korean laborers.

  Then, the situation changed for the worse, reflecting the inefficiency plaguing governmental aid organizations. A new director was appointed to her office in Pyongyang who, as a farmer by trade, wanted to focus on agricultural projects. To pool together a larger share of the budget for his ventures, he cancelled this meaningful endeavor that would have created many jobs and earnings in hard currency. My wife, unfortunately, could not work with SDC any longer. He a
lso refused to pay for my services at the Pyongyang Business School even though he had the funds, meaning the seminars for all business school students were delayed until he departed a year later.

  In the late 1990s, goat breeding became the government’s latest Juche “mass mobilization” campaign because, with its efficiency, the practice could alleviate the food shortages. The country’s leadership called for cooperatives, state factories and companies, farmers, factory workers and soldiers to take part in breeding goats in some form. Unlike other domesticated animals the goats could thrive on shrubs and could easily climb up and down on mountains. The mobilization must have been successful as I saw plenty of goats all over the country.

  A few restaurants in Pyongyang were selling goat yogurt, goat cheese, goat soup and grilled goat, which tasted as delicious as a classic Korean dish, bulgogi, or barbecued beef. The picture shows the production of goat yogurts in 2006 in a rural area.

  North Koreans weren’t big on cow farms. Raising and feed cattle takes more time and effort, whereas goats are quite economical.

  Still, Ambassador Ri Chol wanted to make up for those inadequacies by bringing in more humanitarian organizations. He told the Salvation Army in one meeting, “You are Christians, you should help my country,” according to my own conversations with those representatives. He motivated several such organizations to become active in his country. Once they set up shop in Pyongyang, he continued to help them find local contacts.

  One of these organizations was the Adventist Development and Relief Agency (ADRA), created by the Mormon Church. It’s a Christian humanitarian organization based in the U.S., but that worked on its North Korea programs from its office in Switzerland. Every day, ADRA’s flagship project, an industrial bakery, produced tens of thousands of vitamin-enriched breads for malnourished children in a large nursery. The Swiss retail chain Migros, along with the company ABB (for whom I worked as a country director) and others, lended support to the project with furniture, machines and other equipment as well as training.

 

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