Non-utilization of maximum available resources

was “more to preserve the self-sufficient ideology than to provide effective and accountable assistance to those who need it most.”⁹⁴⁷

636. Some observers have claimed that the situation in terms of access and monitoring inside the DPRK has improved over the years for humanitarian organizations. Some humanitarian agencies have been able to progressively access additional counties.

Furthermore, the use of Korean language speaking not selected by the DPRK is now allowed for certain organizations. Small amounts of progress have been made in the field of monitoring food aid. However, 20 years after humanitarian agencies began their work in the DPRK, humanitarian workers still face unacceptable constraints impeding their access to populations in dire need. According to United Nations Country Team in the Democratic People’s Republic of Korea,

[O]perational restrictions continue to undermine donor confidence and resource mobilization, which in turn undermines discussions on better operating conditions.

Negotiating access in DPRK has been and remains a long and difficult process. The Government often places unacceptable constraints on access required for humanitarian agencies to undertake programme implementation, monitoring and evaluation of activities.⁹⁴⁸

being, including freedom from hunger, unless it can demonstrate that it has used all the resources at its disposal to give priority to essential economic and social needs.⁹⁵⁰

639. Based on the body of testimony and submissions received, the Commission finds that the allocation of resources by the DPRK has grossly failed to prioritize the objective of freeing people from hunger and chronic malnutrition, in particular in times of mass starvation. The state has neither prioritized the purchase of the food necessary for the survival of many in the DPRK, nor investment in agriculture, infrastructure and other ways of improving the availability and accessibility of food in the country. FAO and WFP note that the continuous inability to achieve the official Government target of 573 grams of cereal equivalent per person per day in any given year points not only to issues of food availability, but also to broader supply chain constraints such as storage, transport and commodity tracking.⁹⁵¹

640. Testimony and other information received by the Commission show that the DPRK continues to allocate disproportional amounts of resources on its military, on the personality cult of the Supreme Leader, related glorification events and the purchase of luxury goods for the elites.

(a) Prioritization of military expenditure

641. The DPRK maintains one of the world’s largest standing armies, comprising around 1.2 million people. This represents the world’s highest ratio of military personnel to the general population. Given the secretive nature of the state, figures displaying actual military spending figures are difficult to obtain. Official sources state that around 16 per cent of the total state budget is devoted to national defence.⁹⁵² Other sources estimate that it is around a quarter of the Gross National Product.⁹⁵³

642. Instead of shifting resources to address urgent needs during the course of the famine in the late 1990s, Kim Jong-il placed even more emphasis on the military in line with the

“Military First” doctrine (Songun).⁹⁵⁴ An official broadcast from the Korean Central Broadcasting Station explained this policy:

During that period, which was called the “Ardous March” in our history, Great Comrade Kim Jong-il firmly believed that the destiny of the people and the future of the revolution hinged on the barrel of a gun, and that we could break through the difficulties and lead the revolution to victory only by depending on the Army, …. if the barrel of a gun were weak, a country would be eventually swallowed by outside force, no matter how powerful its economic might be and no matter how advanced its science and technology may be.⁹⁵⁵

950 See CESCR, General Comment No. 12, para. 17, (E/C.12/1999/5), and CESCR, General Comment No. 3, annex III, para. 10 (E/1991/23).

951 FAO/WFP, “Crop and Food Security Assessment Mission to the Democratic People’s Republic of Korea”, 28 November 2013.

952 “Report on Implementation of 2009 Budget and 2010 Budget”, KCNA, 9 April 2010. Available from http://kcna.co.jp/item/2010/201004/news09/20100409-10ee.html.

953 The Center for Arms Control and Non-Proliferation, “U.S. Defense Spending vs. Global Defense Spending”, 24 April 2013. Available from

http://armscontrolcentre.org/issues/securityspending/articles/2012_topline_global_defense_spending/.

954 See also section III.E.

955 On 21 March 2003 an Editorial Bureau Special Article in the DPRK newspaper Rodong Sinmun,

“Military-First Ideology Is an ever-Victorious, Invincible Banner for Our Era’s Cause of Independence” was broadcast on Pyongyang Korean Central Broadcasting Station (KCBS). The

643. A 2003 editorial published in Rodong Sinmun, the newspaper of the Workers’ Party of Korea, similarly notes:

What takes the leading position in the correlation between the army and the economy is still the army…..If economic power is based on military power, military power is a guarantee for economic power and impetus for economic development.

We cannot defend national industries nor ensure a peaceful environment for economy-building without strong military power. Once we lay the foundations for a powerful self-sustaining national defense industry, we will be able to rejuvenate all economic fields, to include light industry and agriculture and enhance the quality of the people’s lives.⁹⁵⁶

644. Expert analysis presented to the Commission shows that a marginal redistribution of state military expenditure towards the purchase of food could have saved the population from starvation and malnutrition. According to economist Marcus Noland, based on the last FAO/WFP Crop assessment, the DPRK has an uncovered grain deficit of 40,000 metric tons. According to the International Monetary Fund, in September 2013, the price of rice was approximately USD 470 per metric ton and the price of corn was around USD 207 per ton.⁹⁵⁷ Basing his analysis on United Nations data, Mr Noland estimates that the size of the DPRK economy was $12.4 billion in 2011.⁹⁵⁸ He states that the reallocation of resources required to close the grain gap is therefore less than 0.02 per cent of national income. If the estimation that 25 per cent of national income is being used for the military is correct, then the grain shortfall could be addressed by cutting the military budget by less than 1 per cent.⁹⁵⁹

645. Marcus Noland further estimates that even at the height of mass starvation, the amount of resources needed to close the food gap was only in the order of USD 100 million to USD 200 million. This represented the value of about 5 to 20 per cent of revenue from exported goods and services or 1 to 2 per cent of contemporaneous national income. At the Washington Public Hearing, he stated,

• “[W]hile the amount of grain needed to close the gap [during the 1990s famine]

was much larger, the price of grain in the 1990s was much lower than it is now. So at the famine’s peak, the resources needed to close that gap were only on the order of a hundred to two hundred million dollars depending on how you analysed data.

Even during the famine period, the North Korean government had resources at its disposal if it had chosen to use them, to maintain imports and avoid that calamity.”⁹⁶⁰

646. Even a delay in purchasing military equipment and using foreign currency instead to buy food on the international markets may have saved a very large number of people. In 1994, when the food shortage was already known to the authorities, the DPRK reportedly

translated text is available from http://nautilus.org/publications/books/dprkbb/military/dprk-briefing-book-dprk-military-first-doctrinal-declaration/.

956 “Military- First Politics is a Precious Sword of Sure Victory for National Sovereignty”, Rodong Sinmun, 2003. Translated text available from

http://nautilus.org/publications/books/dprkbb/military/dprk-briefing-book-dprk-military-first-doctrinal-declaration/.

957 Note that the IMF estimates the price of rice at USD 448 in November 2013 (Commodity Market Monthly, December 2013. Available from

http://www.imf.org/external/np/res/commod/pdf/monthly/121313.pdf).

958 Other figures at the disposal of the Commission suggest this figure to be higher and around 14.7 billion dollars.

959 Submission to the Commission: Marcus Noland.

960 Washington Public Hearing, 31 October 2013, morning (01:16:00).

bought a number of submarines.⁹⁶¹ In 1999, at the same time that it was cutting commercial grain imports to less than 200,000 metric tons, the government reportedly used its foreign currency for the purchase of 40 MiG-29 fighter jets from Belarus and 8 military helicopters from Kazakhstan.⁹⁶²

647. In 2005, the United Nations Secretary-General noted that the authorities of the Democratic People’s Republic of Korea are under a responsibility to reduce military/defence expenditure and ensure equitable re-allocation of resources to respond effectively to the food crisis and other areas needing development.⁹⁶³

648. However, the Commission has received no indication that the DPRK has changed its approach of prioritzing the military over humanitarian concerns. Instead, the current Supreme Leader Kim Jong-un has insisted that “Military First” remains one of the guiding principles of the DPRK. In one of his first public speeches as the Supreme Leader, delivered on 15 April 2012, Kim Jong-un emphasized: “In order for us to eternally glorify the dignity of military-first Korea and successfully accomplish the cause of building a powerful socialist state, first, second, and third, we must strengthen the people’s army in every way.”⁹⁶⁴

649. In a report to the Supreme People’s Assembly on the 2012 state budget, Minister of Finance Choe Kwang-jin mentioned that only “38.9 per cent of total expenditure was spent for enforcing popular policies and measures for social culture under socialism such as the universal free compulsory education system, free healthcare, social insurance and social security, recuperation and relaxation systems as well as those for development of literature and art and building of a sports power.”⁹⁶⁵ While Mr Choe’s report focuses on increased expenditure in areas that could positively impact economic, social and cultural rights, it vaguely mentions that “some of the total state budgetary expenditure went to national defence.”⁹⁶⁶

(b) Use of aid to reduce State spending on food

650. The DPRK has had an ambivalent attitude towards foreign aid. It first considered such aid as an admission of failure of the DPRK system and a point of entry for external meddling. Lee Jong-wha, the Chairperson of the DPRK Food Damage Rehabilitation Committee, described the famine claims as a “pure fiction”. He said that the DPRK did not accept any food aid with political purposes because it degraded the country’s pride and because it might lead to demands for economic and political changes.⁹⁶⁷ In 1997 Kim

Jong-961 See for instance, “North Korea Buying Old Russian Subs”, New York Times, 20 January 1994.

Available from http://www.nytimes.com/1994/01/20/world/north-korea-buying-old-russian-subs.html.

962 Submission to the Commission: Stephen Haggard and Marcus Noland, Hunger and Human Rights, p. 16.

963 A/60/306, para. 17.

964 Speech delivered by Kim Jong-un on 15 April 2012 in Kim Il-sung square in Pyongyang. An unofficial English translation of the full text is available at:

http://www.northkoreatech.org/2012/04/18/english-transcript-of-kim-jong-uns-speech/

965 “Review of Fulfilment of State Budget for Last Year and State Budget for This Year”, KCNA, 1 April 2013. Mr Choe’s report was given before the 7th Session of the 12th Supreme People’s Assembly.

966 Reportedly, the DPRK spent $1.34 billion for the launch of two rockets in 2012. “North Korea’s rocket costs as much as a year’s worth of food,” The Hankyoreh, 8 December 2012. Available from http://www.hani.co.kr/arti/english_edition/e_northkorea/564382.html.

967 Kristin Gustavson and Jinmin Lee Rudolf, “Political and Economic Human Rights Violations in North Korea” in Thomas H. Henrikson and Jongryn Mo, eds., North Korea after Kim Il Sung : Continuity or Change? (Hoover Institution Press, 1997), p. 142.

il stated: “The imperialist’s aid is a noose of plunder and subjugation aimed at robbing ten and even a hundred things for one thing that is given”.⁹⁶⁸ In 2000, Rodong Sinmun reported the official position of the DPRK on humanitarian aid: “The imperialists’ aid is a tool of aggression ... a dangerous toxin which brings about poverty, famine and death, not prosperity.”⁹⁶⁹

651. The DPRK has however used aid for its own political purposes. The DPRK has linked the degree of conditionality attached to aid operations and the number of international aid workers allowed into the country to the amount of money a humanitarian organization brings to the negotiating table.⁹⁷⁰

652. Most problematically, figures indicate that the DPRK has effectively used the inflow of aid as a balance of payments support, rather than as of means for relieving the most vulnerable part of the population from hunger and starvation. Instead of using aid as a supplement to its own commercial food imports, aid has apparently been used as a substitute for commercial imports. The graph below (figure 12), presented by Marcus Noland to the Commission during the Washington Public Hearing, shows that, as the volume of aid delivered to the DPRK increased, the volume of commercial food imports decreased.

Figure 12. Volume of aid and imports on commercial terms⁹⁷¹

653. The graph below (figure 13), also submitted to the Commission by Marcus Noland,

968 Kim Jong-il, “On preserving the Juche Character and National Character of the Revolution and Construction” (19 June 1997). Available from http://www.korea-dpr.com/lib/111.pdf.

969 “North Korea warns against outside aid”, The Associated Press, 4 October 2000.

970 According to the United Nations Country Team in the Democratic People’s Republic of Korea, “the Government continues to link the granting of more favourable operating conditions to the amount of resources being brought into the country, which means that an agency with lower funding is allowed less access to populations.” See “Overview of needs and assistance”, 2012.

971 Submission to the Commission: Marcus Noland based on FAO/WFP data available in the International Food Aid Information System (INTERFAIS) database.

shows the evolution of the DPRK’s overall merchandise imports as compared to the evolution of food imports. Despite the chronic situation of malnutrition in the country, food imports experienced a downward trend between 1993 and 2010, as opposed to overall merchandise imports, which increased substantially.

Figure 13. Democratic People’s Republic of Korea: merchandise imports and food imports⁹⁷²

(c) Role of bilateral donors

654. Multilateral agencies have played a relatively minor role in the delivery of aid to the DPRK. An estimated 75 per cent of the total amount of food aid delivered since 1995 has been provided by China, the Republic of Korea, the United States of America, and Japan.

The conditions under which such assistance have been provided have differed from country to country. In accordance with its Sunshine Policy, the ROK has distributed large amounts of unconditional aid. The USA has linked aid to progress on the nuclear issue. Between 1995 and 2009, the USA provided around USD 600 million in energy assistance to the DPRK. The aid was given between 1995 and 2003 and between 2007 and 2009 in exchange for the DPRK freezing its plutonium-based nuclear facilities.⁹⁷³

655. The way bilateral donors have handled their aid, has affected the work of the United Nations and other humanitarian agencies. Observers have noted that the unconditioned aid that China and the ROK delivered in the mid-2000s put the DPRK in a position to resist some of the monitoring arrangements the WFP sought to put in place.⁹⁷⁴ A report by the US Congressional Research Service (CRS) notes the following:

In 2006, the WFP drastically scaled down its programme after the North Korean government imposed new restrictions, limiting the organization’s size and ability to distribute and monitor its shipments. The WFP and Pyongyang then negotiated a new agreement that would feed 1.9 million people, less than a third of the 6.4 million people the WFP previously had targeted. The total population in the DPRK constitutes approximately 22 million. In the deal with the WFP, expatriate staff were cut by 75 per cent, to 10 people, all of whom were based in Pyongyang. Before 2006, the WFP had over 40 expatriate staff and six offices around the country conducting thousands of monitoring trips every year. The DPRK government did not allow any Korean speakers to serve on the WFP’s in-country staff.⁹⁷⁵

(d) Parallel funds for the benefit of the Supreme Leader

656. The economic and financial problems faced by the DPRK in the 1990s, led the DPRK authorities to engage in a number of legal and illegal activities to earn foreign currency.⁹⁷⁶ However, the currency earned was not used to purchase food, medicine or other goods, which the population urgently needed during the famine. Instead, it was channelled into parallel funds that are outside the regular government budget. ⁹⁷⁷

972 Submission to the Commission: Marcus Noland based on data provided by the ROK Ministry of Unification, FAO Special reports, and Mr Noland’s own calculations.

973 Congressional Research Service (CRS), “Foreign Assistance to North Korea”, 11 June 2013.

974 See “North Korea rejects UN food aid”, BBC News, 23 September 2005. Available from http://news.bbc.co.uk/2/hi/asia-pacific/4273844.stm.

975 CRS, “Foreign Assistance to North Korea”.

976 Stephen Haggard and Marcus Noland, Famine in North Korea, p. 245.

977 TBG025, TJH015.