Peace Economics Peace Science and Public Policy Volume Issue Article Fall 2004 Report on Critical Dimensions and Problems of the North Korean Situation 1996 2004 Paul S Han Cornell University Copyright c 2004 by the authors All rights reserved No part of this publication may be reproduced stored in a retrieval system or transmitted in any form or by any means electronic mechanical photocopying recording or otherwise without the prior written permission of the publisher bepress Peace Economics Peace Science and Public Policy is produced by The Berkeley Electronic Press bepress http www bepress com peps Han Report on Critical Dimensions of the North Korean Situation SECTION 1 INTRODUCTION National security is top priority of the South Korean government policy because North Korea is hostile country of South Korea The DMZ 38 line is the most militarized zone in the world and South Korean men are required to serve in the army for 2 years While North Korea is enermy of South Korea North Koreans are cultural and blood brothers of South Koreans Since the request of food assistance of North Korea in 1995 South Korean government and a number of charity organizations have sent food and relief goods to North Korea The reconsiliation and unification of North and South are not only the ultimate goal of Koreans but also the work of today The South Korean government needs to help North Korea for the peace of Korean peninsula as well as the humanitarian purposes Although there has been huge support from the international society for more than 10 years North Korea had suffered serious famine and still has a shortage of food In spite of its efforts to increase food production such as new production team organization price reform the measures seemed not to bring about expansion of production because of the chronic lack of resources To overcome economic stagnation North Korea can take advantage of South Korea North Korea can lure South Korean investment and it can export its products to the South Korean market This paper is about one possibility to solve food shortage problem using interKorean trade The idea of changing crops policy came from the experience of South Korean agricultural development During the 1950s and 1960s the South Korean government largely imported grain from the U S A The successful adaptation of South Korean farmers to Korea s poor endowment of arable land has been the shift away from grain a land intensive crop to various cash crops sericulture and the like where the value of output per unit of land is much higher than for grain The industrialization urbanization and export boom provided a rapidly expanding market for farm output Considering current and future situation North Korea can follow the South Korean agricultural development Like South Korea North Korea has only small arable land and it does not have good climate to raise rice compared to other East Asian countries While it is not suitable for raising rice it can produce vegetables and fruits which can be exported to the South Korean market Unlike grains vegetable and fruits are perishable and they incur high transportation cost when the Produced by The Berkeley Electronic Press 2005 2 Peace Economics Peace Science and Public Policy Vol 10 2004 No 3 Article 4 distance from origin to market is long Fresh North Korean agricultural products can be supplied by land when the roads and railroads between North and South are connected This paper consists of 5 sections Section presents the North Korean food situation and distribution in the late 1990s and the early 2000s It focuses on the relationship between the irregular Public distribution ration and death rate Section reviews the North Korean agriculture system and new production team reform In spite of the North Korean government s measure to give farmers more incentive there is little evidence that shows the increasing production of grains Section contains inter Korean trade The value of inter Korean trade is relatively small compared to the value of total South Korean trade but it gradually increased for 15 years Especially commission based processing trade using North Korean labor is a good example to show economic complementarity between North and South Korea In section I suggest North Korea can take advantage of the large price difference between North and South Korean agricultural products Instead of pushing farmers to produce more grains the North Korean government should encourage farmers and collective farms to produce cash crops which can be exported to South Korean market through roads and railroads in the future http www bepress com peps vol10 iss3 4 Han Report on Critical Dimensions of the North Korean Situation SECTION 3 THE NORTH KOREAN FAMINE 2 1 Introduction From the early 1990s North Korea has suffered widespread food shortages The main causes for the declining food production were 1 the lack of agriculture inputs such as fertilizer pesticides plastic sheets and fuels 2 worn out infrastructure 3 inefficiency of planned economy and 4 natural disasters such as floods and droughts Unfavorable changes in trade with its traditional partners the former USSR and Eastern Europe also negatively affected the North Korean economy and its agriculture When the North Korean famine occured most analyses in South Korea were focused on how much food North Korean needed In other words people wanted to estimate food production and food demand in North Korea Table 2 1 is the estimated food production in North Korea by the South Korean government and the World Food Programme WFP from 1996 to 2002 Table 2 1 Estimated North Korean Food Production Unit million tons Year 1996 1997 1998 1999 2000 2001 2002 Production South Korea estimate 3 69 3 49 3 89 4 22 3 59 3 95 4 13 Production FAO WFP estimate 5 03 2 74 3 48 3 42 2 57 3 54 3 84 Note Food production includes grains beans and potatoes Sources Korea National Statistical Office Korean Statistical Information System website www kosis nso go kr FAO WFP Special Report FAO WFP corp and food supply assessment mission to DPR Korea each year website www wfp org country brief index asp region 5 The estimates on the level of food demand were different depending on the assumption made on how much food is required per person per day Estimates for the total food demand were about 5 6 million tons It is known that 1 or 2 million tons were needed to solve the North Korean food shortage Produced by The Berkeley Electronic Press 2005 Peace
View Full Document
Unlocking...