Distinguished Speaker Seminar: Marcus Noland - North East Asia: Current Issues and Future Prospects

Marcus Noland, Senior Fellow at the Peterson Institute for International Economics, outlined the making of the North Korean famine in the 1990s. He also discussed issues including aid ineffectiveness, continued food crisis, and recent policy changes, and warned that the country once again faced the risk of famine.

Noland stated that North Korea pursued collectivization of its agriculture after the Korean War and made the agricultural system one of the most input-intensive in the world. Characteristics of the agricultural system included continuous cropping, overuse of chemical fertilizers, and hillsides being denuded to bring more and more marginal land into production which resulted in soil erosion, river silting, and frequent flooding. The autarkic economy, on the other hand, pursued the goal of self-reliance but developed its extreme reliance on the former Soviet Union in terms of coal, oil, and other industrial inputs. Since the country conducted half of its foreign trade with the Soviet Union, the disintegration of the latter brought about a massive trade shock. The North Korean industrial economy imploded and deprived of industrial inputs, agricultural output plummeted.

From its peak in the late 1980s grain production declined significantly in the early 1990s to less than 4 million metric tons. The country fell into famine in 1994. Catastrophic floods in 1995 and 1996 only added to the North Koreans’ plight. Though there is no consensus in the literature, Noland claimed that the famine resulted in deaths of approximately 3-5 percent (600,000 to 1 million) of the country’s pre-crisis population. Though a combination of humanitarian aid and increased marketization of the formerly centrally-planned economy has improved the situation somewhat, the World Food Program (WFP) and other observers have warned that the country is once again on the precipice of another famine.

Noland argued that policy changes that began in 2005—including confiscation of grain in the rural areas, an attempted ban on its private trade, and the threatened expulsion of humanitarian aid organizations—have exacerbated the problem. He stated that the situation has been further worsened by foreign provocation which has soured relations with donor countries. He indicated that in the short-run, food aid is needed to avert a calamity. However, Noland suggested that the long-run solution to North Korea’s chronic food problems is for the country to open up externally by exporting manufactured goods, mining products, and some niche agriculture, forest and fisheries products, and import bulk grains. He underscored that a permanent solution to the North Korean food crisis and its economic revival would continue to depend on future diplomatic developments.