Marcus Noland is a senior fellow at the Peterson Institute for International Economics. His work encompasses a wide range of topics including the political economy of US trade policy and the Asian financial crisis. Mr Noland is unique among American economists in having devoted serious scholarly effort to the problems of North Korea and the prospects for Korean unification. He won the 2000–01 Ohira Masayoshi Award for his book Avoiding the Apocalypse: The Future of the Two Koreas.
His new book, co-authored with Stephan Haggard, Famine in North Korea: Markets, Aids, and Reform presents a comprehensive account of the famine to date, examining not only the origins and aftermath of the crisis but also the regime's response to outside aid and the effect of its current policies on the country's economic future.
Marcus Noland spoke to The Asia Society on March 29th prior to the Asia Society program featuring his new book.
Read excerpts from Famine in North Korea from Columbia University Press.
Could you briefly outline the main arguments in your book, Famine in North Korea: Markets, Aid, and Reform?
The book is organized into three sections. The first section deals with the origins and impact of the famine. We see the famine created by two forces. The first is fundamentally misguided economic policies and the second is a political regime that was completely unaccountable and unresponsive to the population. As a result we estimate that six hundred thousand to a million people died, which would be 3-5 per cent of the pre-crisis population, or the equivalent of fifteen million Americans, if such an event were to happen here.
The second part of the book deals with the problems posed by the North Korean state for the humanitarian aid community. The North Koreans, once they admitted that they had a problem in 1995 and aid started rolling in, put roadblocks in front of the humanitarian community at every step of the way. As a consequence the program in North Korea that continues to this day - it's been going on now for over ten years - has never reached international standards. With this program, one is constantly battling the North Korean authorities to improve efficiency and effectiveness. We argue that there was a weakness in the monitoring regime that the donors were able to put into place, primarily the World Food Program, which was the single largest donor, and on whose monitoring schemes smaller private NGOs bandwagoned. Because of the weakness of that monitoring system we estimate that a significant amount of the aid was diverted from its intended beneficiaries. In the context of North Korea, where markets had been completely eradicated we argued that the existence of this aid actually facilitated the development of markets. The implicit value of that aid was astronomical but the rents or the profits that one could capture by selling the aid could only be captured if there were markets in which to sell it. So the breakdown of the system, which was one of state failure, which forced families, work units, local party organs, small scale military units into entrepreneurial coping behavior, was reinforced by the diversion of aid into the markets that began arising to satisfy people's needs. We estimate by the late 1990s or early part of this decade that the typical North Korean household was getting most of their food via the market, not via the state-operated quantity rationing system called the Public Distribution System or PDS.
The third part of the book looks at that legacy. Because of the way that the economy marketized, specifically the food economy, the situation morphed from a classic socialist famine in which access to food was politically determined to a chronic food emergency where access to food is determined by one's ability to command resources in the marketplace. We argue that that process of marketization began with food but quickly spread to other products and that the marketization of the North Korean economy that has gone on for the last fifteen years is best understood as an unintended decentralized grassroots bottom-up process -- not something that the central government undertook as a conscious policy to achieve particular economic or political goals.
Indeed, the government's response to these developments has been ambivalent -- in some ways ratifying and decriminalizing this coping behavior, much of which was technically criminal, in some ways trying to channel it in particular directions and in some ways trying to reverse it. North Korean policy in the last two years on this set of issues has been reckless and we argued that the government undertook policies in the fall of 2005 that risked creating a renewed humanitarian emergency. Indeed yesterday Anthony Banbury, the Asia Regional Director of the World Food Program, had a press conference in Beijing after leaving North Korea and said that millions are at risk if higher volumes of aid are not forthcoming.
You said that the humanitarian program in North Korea never reached "international standards". What are international standards for humanitarian aid distribution?
There is literally a protocol. There's a manual about how you're supposed to run a humanitarian aid program. The first step is to do an assessment. You can't design solutions unless you know the nature of the problem. So you're supposed to do an assessment, identify what the source of the problem is, who the affected groups are, how many people there are and so on. Once you've done that evaluation you can design a program to address the problem. Once that program is being implemented, there are procedures for monitoring and assessment. The implementation of the program is supposed to be governed by certain norms. For instance, non-discrimination: if there are hungry people you're supposed to provide aid in a non-discriminatory manner, not based on ethnicity or politics or religion or something like that.
In the case of North Korea, at its peak, the WFP and the other donors in principle were feeding about a third of the population. North Korea never allowed them unimpeded access to the population and, indeed, put other restrictions on them, such as they were not allowed to use Korean speakers. As a second best solution, since they weren't allowed to get to the population, they targeted specific institutions - orphanages, hospitals, elementary schools - with the notion that if they provided aid to these institutions, needy people would receive the food. They ended up with about forty thousand of these institutions, for which the North Korean government has never provided a comprehensive list. So you had a program where large amounts of food were going and in theory they were going into these forty thousand NGOs or institutions. You had, at the peak, less than 50 non-Korean speakers trying to implement and monitor the system in an area the size of New York state or Louisiana. The drivers were supplied by the central government. The translators were supplied by the central government. To visit a particular hospital or orphanage required pre-notification, generally one week in advance, which obviously would give ample opportunity to fix things up, so to speak. There are documented cases that resulted in the withdrawal of certain NGOs, such as Médecins sans frontières (MSF), when they clearly saw that there was discrimination on the basis of perceived political loyalty in the distribution of food or medical care.
In one of the examples we cite in the book, which would be farcical if it wasn't for the stakes, I spoke to more than one aid worker, none of whom spoke Korean, who told me the same story. North Korea is basically a mountainous country. They would ask to visit a certain hospital, a certain public distribution center. They'd be driven around the mountains and they would be taken to one of these centers. And then the next day they were supposed to go visit another place and they would arrive at the place they swore that they had been taken to the previous day. And the North Korean officials would insist, "No, no, no, this is such-and-such place. Yesterday you were at this other place." But the fact of the matter is they couldn't read the road signs. They were in a mountainous area, they were being driven around. I spoke to more than one aid worker who believed that they were brought to the same place more than once and told it was two different locations.
Now, having painted a pretty bad picture, let me say two things. Normally when people talk about diversion they imagine a vast centralized conspiracy, with the food going to the army or the party elite or somebody. That may well have happened. I can't say it didn't. But in our book we argue that given the structure of the institutions within North Korea and given the practices of the aid donors, we believe it's more plausible that this diversion actually occurred at lower levels. And it occurred for a whole variety of motivations and reasons.
Given that we believe the diversion was widespread, the Bush Administration did something that I actually think was useful when they came into office (and I'm not a political supporter of the Bush Administration). Andrew Natsios, who had a background in famine and, indeed, had written a book on the North Korean famine, was appointed the Administrator of USAID [United States Agency for International Development]. One of the policies he pushed, which I think was a very constructive policy, was to channel a substantial amount of the U.S. donation to the WFP into ports in the extreme northeast of the country, which was the worst famine-affected region in the 1990s and continues to have the worst chronic malnutrition problems. So the idea was, even if the food was being diverted at the port it was likely pooling in that catchment area. While it may not have gotten to the neediest of all people, it was probably getting to people who in fact were in need.
The other thing one could do is provide the food and aid that the elite didn't like to consume. So instead of providing rice, provide barley or provide millet. Again, it may well be the case that the food aid was diverted. But given the locations that one was delivering it to and given the composition of the aid, one hopes that it had a kind of second best ameliorative effect.
There are some experts who suggest that sanctions, the imposition of economic and other punitive sanctions, often do little to weaken authoritarian governments and simply punish the people. Do you agree with that view?
We address this argument directly in the book because we take seriously the argument that providing this aid to the central government simply reinforces the central government's control over the people. The problem is you have a very vulnerable population of people who have no effective voice. The government is unaccountable to them. So the ethical dilemma in this case is, do you cut off aid? Do you cut off aid in the hope that you will engineer a collapse of the government in effect sacrificing the interests of people today against hope for a better future? Or do you accept that you have no real choice but to engage, and to try to structure the engagements that are most likely to have an ameliorative impact without supporting the central government. We end up in that position, that we have no other choice but to engage. But we should be clear eyed about the terms of that engagement. And where we can, we should certainly try to push engagement in directions that uphold our values.
Do you think that the U.S. should engage bilaterally with North Korea?
Our food aid is typically done multilaterally via the World Food Program. But in a broader political sense, of course we should engage bilaterally with North Korea.