Statistical Blackouts in North Korea:  Trade Figures Uncovered
by Nicholas Eberstadt

Since the early 1960s analysis of economic performance in the Democratic People’s Republic of Korea (DPRK) has been severely limited by a prolonged and strictly administered statistical blackout. At this juncture no official data series on any aspect of the country’s economic performance is being released regularly. Data about DPRK’s international commerce are the only exceptions; but these are released from its trade partners—figures known as mirror statistics. Trade trends in three sectors—food, energy, and transport— are of major strategic significance to the entire DPRK economy. 

The severe and continuing downturn that has gripped North Korea’s economy since 1989 has intensified pressures on each of these critical sectors, most dramatically on the food sector, whose woes prompted Pyongyang in 1995 to issue its unprecedented international appeal for emergency humanitarian aid. Difficulties in any one of these sectors cannot be understood in isolation, however. The DPRK’s current agricultural troubles, for example, have probably been compounded materially by energy shortages, on the one hand, and transport system problems on the other. The linkages between these three sectors suggest that problems in one area are unlikely be resolved, and may not even be significantly relieved, without tangible progress in the other two. 

Transport Purchases Bogged Down 

During 197295 the DPRK imported transport equipment valued at an estimated $2 billion (in nominal dollars, at current official exchange rates). More than half of these imports originated in the former Soviet Bloc territories (48 percent in U.S.S.R./Russia, 7 percent in countries of Central Asia, as well as Central and Eastern Europe). Roughly 40 percent came from OECD countries (29 percent from Japan, 10 percent from Germany and other OECD members). The remainder—just 6 percent —was shipped from China or from developing countries. (Although inter-Korean trade officially began in the late 1980s and had achieved a cumulative turnover approaching $1 billion by 1995, Republic of Korea transport equipment exports to the DPRK during this period were negligible.) Between 1972 and 1995 the DPRK transport equipment sales identified through mirror statistics—adjusting for some obvious statistical errors—averaged a trivial $3.4 million per year. Evidently, the DPRK’s hoped for “independent national economy” never really developed the capability to manufacture nonmilitary motor vehicles that could be sold abroad. 

DPRK’s imports of nonmilitary transport equipment appear to total roughly 41,500 automobiles, 46,500 trucks, 2,300 buses, some 115 locomotives, and an additional 5,500 tons of railway equipment between 1972 and 1995. Mirror statistics do not allow us to estimate the size of the country’s road fleets; one U.S. government source, however, estimated that 264,000 vehicles were in use in the DPRK in 1990—military trucks and jeeps included. If this estimate is correct, the ratio of road vehicles to population in the DPRK in 1990 would have been among the lowest of any Communist state. In Eastern Europe, for example, the ratio of vehicles to population around 1989/ 90 would have been 10 times higher than in the DPRK. For the Soviet Union the ratio would have been well over three times the DPRK’s. 

Between the early 1970s and the mid1990s a revolution in transportation capabilities swept the world; to judge by mirror statistics, however, that revolution bypassed the DPRK. In fact, one may infer from the absolute decline in the nominal value of DPRK transportation imports in the early 1990s, and from recent reports of DPRK sales of scrap metal from motor vehicles, that the country’s transportation system, for decades under-mechanized and stretched thin, is now afflicted by positive decay. 

Food Exports Despite Shortages 

The DPRK imported about $2.7 billion in foodstuffs between 1972 and 1995, judged by mirror statistics. The nominal dollar value of DPRK food exports for those same years is close to that total, at $2.8 billion. This appears to be the only sector in which the DPRK’s longterm exports and imports are in rough balance—and in which annual trade surpluses have been registered on a fairly regular basis. 

DPRK food exports between 1972 and 1995 averaged about $115 million a year. Principal overseas purchaser were Japan (accounting for about 44 percent of the nominal total for the entire period); the U.S.S.R./Russia (26 percent); developing countries, in particular, Indonesia, Malaysia, and Singapore (16 percent); and China (11 percent). Between 1989 and 1995 the Republic of Korea’s purchases of DPRK foodstuffs totaled roughly $70 million. 

As was true for DPRK exports as a whole, the country’s overseas food sales seem to have risen somewhat during the 1980s, and to have dropped since the final crisis of Soviet socialism. In the 1970s (197280) exports of cereals accounted for about 70 percent of DPRK foodstuff exports; by the 1990s (1991 95) cereal exports accounted for less than 1 percent. During the intervening years such items as seafood and mushrooms assumed a much more prominent place among the DPRK’s limited foodstuffs available for sale overseas: “low cost” calorie foodstuffs were gradually being replaced by “high cost” calorie exports. 

Food imports to the DPRK for 197295 averaged about $110 million a year (in current dollars, at official exchange rates). Roughly a third (34 percent) of food imports originated in the OECD, while China accounted for about 26 percent, and the U.S.S.R./Russia and the developing countries accounted for 23 percent and 17 percent, respectively. The regional composition of the DPRK’s food import sources has shifted over time. In the 1970s OECD countries were the country’s prime source of food imports, while since the early 1990s China has served its chief food supplier. 

In the decade 1985-94, DPRK net imports of cereal products reportedly totaled about 6 million tons—an average of 600,000 tons per year. Net grain imports could have constituted a significant share of overall dietary energy for the country’s population in the decade before Pyongyang’s first emergency appeal for food aid. Several aspects of the DPRK’s international cereal commerce, as reflected in mirror statistics, deserve special comment: 

• The bulk of cereal imports in any given year is accounted for by a small number of transactions, typically exceeding 50,000 tons apiece. All other imports, in contrast, were purchased in a large number of smallvolume sales (sometimes only a ton or two), generally for delicacies or such luxury items as “Bread or biscuits,” “Cakes or pastries,” and even “Diet infant cereal preparations.” Purchases of this kind would be consistent with a “two tier” food procurement system: food purchases for the general population and provisions for a small, but distinctly better-fed elite circle. 

• ·The DPRK experienced an abrupt decline in cereal imports in 1994. In 1992 and 1993—immediately after the collapse of the U.S.S.R.—Chinese grain shipments to DPRK reportedly averaged nearly 800,000 tons; in 1994 they fell to less than 280,000 tons. The DPRK’s “food crisis” (reports began to circulate in the international media in early 1995) followed closely China’s cutback in grain shipments on “friendship” terms. 

• Between 1972 and 1995 Pyongyang ran a deficit in its non food accounts averaging more than $450 million a year (in nominal dollars), equal to 40 percent of its nonfood exports for the period. Over the same period the country’s overall trade in foods registered a slight cumulative nominal dollar surplus. A net food trade surplus was registered in the “precrisis” year, 1994, and even in 1995, which witnessed the DPRK’s first international appeal for humanitarian aid! It seems that the country’s food trade has been administered according to the principle of financial “selfsufficiency.” DPRK authorities may believe that solving “the food problem” through flows of humanitarian aid from abroad imposes no additional burdens on the foreign exchange account. 

Energy Imports Gathering Steam 

Between 1972 and 1995 the nominal dollar value of reported energy product shipments into the DPRK amounted to about $6.3 billion, or about $260 million a year. More than 95 percent originated in the U.S.S.R./Russia and in China. The collapse of the Soviet state caused a massive disruption in DPRK energy supplies. Between 1982 and 1990 the country’s estimated energy imports averaged almost $450 million a year. For 199195 it dropped to about $250 million a year. Since the collapse of Soviet DPRK trade, China has accounted for nearly 90 percent of the country’s energy imports. The DPRK’s reported energy exports for 197295 totaled $742 million: an average of about $30 million a year, of which roughly 60 percent went to China and 31 percent to Japan. 

DPRK imports of crude oil and petroleum products in 1994 and 1995 averaged 1 million tons a year—less than half the 2.2 million tons a year reported in 1986 and 1987. Soviet/Russian shipments plummeted from 1 million tons in 1986 to a mere 19 thousand tons in 1995. China’s reported oil and oil product exports to the DPRK also declined over that decade, albeit only gradually. Imports of coking coal (coke) appear to have fallen from about 330,000 tons in 1986 to less than 100,000 tons in 1995. With the dissolution of the U.S.S.R., coke shipments by Moscow to Pyongyang effectively ceased. 

Cutting imports of oil products can restrain the use of gasoline-powered engines and cut production of petroleum-intensive agricultural inputs, such as fertilizer and pesticides. Limited availability of coke can create bottlenecks in the iron and steel industries, and thus for other sectors whose demand for iron and steel is high. If foreign observers are correct, the current troubles with the DPRK’s coal supplies are chiefly the result of sharp drops in its own coal output. This might have been caused, in turn, by shortages of other energy sources; for example, if diesel fuel for mining equipment was in short supply. 

Much of Pyongyang’s effort to solve its fuel and power problems in recent years has focused on negotiations with foreign governments for concessional supplies of coal and oil. In the summer of 1996 Beijing agreed to provide the DPRK with annual shipments of 1.3 million tons of oil and 2.5 million tons of coal for the next five years—all gratis. Further, under the terms of the “Agreed Framework” it signed with Washington in October 1994, the DPRK has obtained a total of 650,000 tons of heavy crude oil free of charge, through the Korean Peninsula Energy Development Organization (KEDO). And under the terms of that accord Pyongyang stands to gain additional amounts of free oil—up to 500,000 tons a year—until the nuclear reactors now under construction by KEDO in the DPRK are operational. Yet all this will provide only a limited measure of relief to a badly battered economic system. 

The current aid-oriented approach to the DPRK’s food and fuel problems can be criticized as an application of mere tactical remedies for deep-seated structural problems—a substitute for a more thorough overhaul of the state’s economic policies. From the vantage point of the DPRK leadership, this may be precisely the allure of the current approach.