Showing posts with label supplemental. Show all posts
Showing posts with label supplemental. Show all posts

Wednesday, December 22, 2021

Kim Jong-un's First Decade - A Decade of Market Growth

This is the fourth and final of the supplemental articles for the Kim Jong-un's First Decade in Power series. It details the various infrastructure changes and weapon developments of North Korea's conventional forces over the last decade.

Undated image from the North Korean government (via Naenara.com) of the interior of a marketplace in Pyongyang.

Introduction

Modern markets in North Korea trace their history back to the chaos of the famine of 1994-98 that killed upwards of 1 million people through starvation and related diseases.

As the central government’s ability to feed the people through the Public Distribution System failed (previously a citizen’s primary source of food), people had to make the decision to either abide by state ideology and starve or they could take matters into their own hands.

Since the vast majority of men were either serving in the military or still forced to report to derelict state factories for “work”, women took the lead and created the foundations of today’s market system that has spawned an entirely new generation, the jangmadang generation (those who came of age after the famine and during the period of marketization).

What began as highly illegal activity in the black markets has, twenty-three years after the famine, evolved into a series of legal and quasi-legal markets that has resulted in an entire generation never knowing reliance on state rations and who are unlikely to give up that freedom (and a greater selection of goods) to go back to the old days of the Public Distribution System’s monopoly.

The evolution of markets has weakened the regime’s internal travel restrictions and prompted an interest in entrepreneurship that can be seen in the creation of private transportation companies and a booming housing market, enabling the development of a middle class for the first time in North Korea’s history.

The regime has grappled with this loss of control through cracking down on market activity and, at times, trying to bring it under central authority by giving it a level of legitimacy (particularly in Kim Jong-un’s first several years as leader). But while Pyongyang is still trying to adapt to the reality that markets are likely here to stay, the wheels of commerce have not stood still. Today there are at least 477 markets throughout the country providing everything from rice and corn to home goods, foreign entertainment, and medicine.

Although there has been considerable research into early market development and its impact on people’s lives, I want to take this opportunity to show the growth arc of markets over the last decade and to reiterate that, absent the recent effects of COVID-19, market activity has not stalled or reached a saturation point but remains a dynamic economic force both because of and in spite of the regime.

 

A quick note: I have tried to tailor this report to focus on the markets and on how economic policies have affected them. More details and a broader view on economic policy under Kim Jong-un will be the focus of an upcoming regular article of the series.

 

Early Policies under Kim Jong-un

Perhaps due to his preoccupation with consolidating power or perhaps because he realized the state still couldn’t be the sole provider of people’s needs as in the days of Kim Il-sung, Kim Jong-un initially took a wait-and-see approach to the markets with the occasional foray into reform.

Exactly how open he was to reform is up for debate, but there is clear evidence that he was not only willing to continue the tacit approval of the growing market economy as his father had been forced to in the wake of the famine, but he was also willing to become the first North Korean ruler to implement market-oriented reforms (at least for a time) that positively affected the average person.

The government has tried to integrate the market economy into the centralized command economy by allowing the markets to exist while taxing them and regulating the kinds of goods that are allowed to be sold. As Prof. Andrei Lankov summarized in his 2016 report The Resurgence of a Market Economy in North Korea, “The government’s approach to the private sector has been mixed. It generally accepts private enterprise as a necessary evil, but for political reasons, it is not prepared to legalize it completely. Kim Jong-un’s government is more tolerant of private enterprise than its predecessors.” However, “the outright legalization of the private sector appears unlikely.”

Kim has also sought to compete with the markets by modernizing an ever-growing number of state-owned department stores. While these stores are not part of the ground-up marketization that has spawned hundreds of trading locations across the country, they have helped to fill a need for those who have managed to make it into the monied-class through private economic activity, particularly in Pyongyang.

With this mix of private and state options that currently exist, those with enough disposable cash can have access to bulk rice and illegal South Korean TV shows via the trading stalls and can then go purchase $1,000 designer handbags in department stores – with the added bonus of not risking getting arrested as the store's products are fully sanctioned.

But legitimizing the markets themselves was only one part of the economic puzzle that has led to a relatively robust market economy.


Chart showing the relative stability of the black market value of the North Korean won prior to the COVID-19 trade restrictions. Image source: DailyNK/Bloomberg.

The government has also taken a lax approach to the black market exchange rate of the won. Officially, 100 won is roughly equal to $1 USD, but in the markets, it’s well over 5,000:1.

Instead of instituting more disastrous currency reforms as it did in 2009, it has allowed the black market rate to serve as the won’s true indicator of value while being more aggressive in regulating the use of foreign currency. So, people have been able to save and invest using the North Korean won and those savings have not been at risk of arbitrary confiscation or a dramatic devaluation at the hands of the central bank in years.

This sense of stability has further strengthened the marketization process up and down the entire system.

In 2012, in one of Kim’s first major economic changes, he allowed farmers to keep their surplus produce to sell or trade and to keep any profits. Prior to the famine, selling food from state-controlled farms was highly regulated. Now, farmers would have incentives to keep working on government farms (instead of leaving to tend to their own illegal plots). Under this plan, improving agricultural output to alleviate food shortages was the state’s goal. However, it had the secondary effect of filling the markets with more and more foodstuffs and enabled farmers who’d otherwise be forced to rely on less than $15 a month in wages to earn enough money to live and not merely subsist.

Initially, it was projected that (so long as they met state quotas) most farmers would end up being able to sell 30-50% of their harvest in the markets. Enabling food to be sold and distributed locally is also highly beneficial during times of food scarcity as it improves the efficiency of distribution and ensures supplies still exist even as prices rise.

With the addition of new initiatives by the regime to dramatically increase the allowed size of ‘kitchen gardens’ from 100 sq. m. to 3,000 sq. m., by 2015, data from the UN Food and Agriculture Organization and anecdotal reports from within the country seemed to show that these early reforms by Kim Jong-un were bearing fruit.

 

Another major part to why markets continued to thrive has been the end of the Songun (military-first) policy. Instituted by Kim Jong-il to give the military a greater role over economic planning and the prioritization of resources when the regime saw itself under extreme external threat, the policy created massive distortions in the economy and diverted needed investment away from light industry and agriculture.

Kim Jong-un has worked to dismantle Songun in favor of his Byungjin Line or “parallel development” that seeks to pursue nuclear weapons without neglecting the domestic economy. A refocused approach to bolstering light industry and improving the quality of consumer goods has led to some improvements in the quality and diversity of available goods while also seeing factories in various sectors modernized.

 

Market Growth

In 2018 the Center for Strategic and International Security released a report on North Korea’s markets. Their reporting revealed that there were at least 436 officially sanctioned markets in the country and that the government received $58.6 million each year from stall rental fees and taxes.

Additional CSIS reports showed that a substantial portion of citizens earn at least 75% of their income from market activities. This finding fits well within what others have reported including New Focus International and defector testimony.

Based on the AccessDPRK Mapping Project (2021), this supplemental report provides an update on the number of markets in the country.

There are at least 477 markets in North Korea with 20 being identified as informal street markets and 457 being official markets. Of the official markets, some are still open-air sites with no permanent buildings. Because of this, it can be difficult to ascertain changes to the level of activity occurring there. So, I will only be focusing on the 441 markets that have permanent vendor stalls, as their construction and removal can be tracked across time, providing better direct evidence for the health of the economy in each city.

– A note on methodology, formal markets tend to have a defined boundary wall. Within that boundary can exist vendor stalls plus open ground for overflow capacity. Often, they include both. In cases where a substantial portion of the market is just open space, I have only included the areas occupied by stalls as the market’s “area”, as those stalls are responsible for most of the everyday economic activity that occurs and are the only thing that can be routinely measured. –

This chart shows the total area of the new markets constructed each year.

Since 2011, I have noted thirty-nine newly constructed markets. Of those with precise construction dates (there’s occasionally gaps in Google Earth imagery) two were built in 2011, four in 2012, three in 2013, five in 2014, four in 2016, three in 2017, five in 2018, six in 2019, three in 2020, and one is known to have been constructed in 2021. As this shows, there has been no real decline in the growth rate of markets over the course of the decade until the onset of the COVID-19 pandemic.

In 2011, 2,650 sq. m. worth of new markets was constructed and by 2019 that had grown to 23,260 sq. m. of additional market space. But that dropped precipitously following COVID-19 with only 7,450 sq. m. of space added in 2020 and just 630 sq. m. verified in 2021.

A further 114 markets have also grown in size since 2011. In total, there is 1,502,270 sq. m. (16,170,299 sq. ft.) worth of vendor stalls within the 441 market sites reviewed. That’s a net increase of 236,320 sq. m. (2,543,727 sq. ft.) since 2011. There are also tens of thousands of square meters in various overflow spaces outside of the main market buildings, but as these spaces aren’t always clearly delineated and often spill out into the streets or surrounding fields, trying to measure them can become somewhat arbitrary.

The largest single market in the country by area is the Sariwon market located in Kuchon-3 district (38.501407° 125.778737°). With at least 29,000 sq. m. of space, it’s over 8,000 sq. m. larger than the next largest market in North Korea. The market was constructed in a former stadium and includes a large central building surrounded by dozens of smaller structures that hold vendor stalls and other facilities.


Some other market-related stats are:

  • The newest market is in Hamhung. Constructed between 2020-2021, this small market (39.953089° 127.560062°) provides facilities to the growing districts around the Chemical Materials Institute and Tonghungsan Machine Plant.
  • There are 26 markets greater than 10,000 sq. m. in size.
  • There are 95 markets with less than 1,000 sq. m. worth of vendor stalls.
  • The smallest market (as best as I can determine using Google Earth measurements) is in the town of Hwaam (40.675307° 126.451652°) and only has ~130 sq. m. of active space. It does have some overflow area, but currently, there is just a small cluster of permanent structures.
  • Although it wasn’t until 2002 that the government allowed officially sanctioned markets to operate, based on the available Google Earth imagery, at least 56 market sites with permanently constructed buildings had already been in existence prior to 2002. These include markets in Anbyon, Sinpo, Wonsan, and at least eleven in Pyongyang. These are, of course, in addition to the many open-air street markets that also existed at the time that were later converted to permanent sites.
  • Based on a 2014-16 survey, there are over 600,000 individual vendor stalls within official markets. Today, that figure is likely closer to 750,000 as substantially more markets have been identified and others have grown.

 

Different approaches to the measurement of market sizes and the addition of new markets constructed since the 2018 CSIS market report makes directly estimating government revenue from that report difficult. However, using their published estimates for government revenue from each market, the range of annual revenue each square meter of market space brings in is between $26.56 and $36.05. Applying those figures to the current amount of active stall space as measured in this supplemental report, the central government receives between $39.7 million and $54 million in revenue. If one were to include open-air markets (which are variable in size) or include the overflow spaces as part of the revenue-making area, as of 2021, the government brings in over $60 million each year.


Later Changes and the Effect of COVID

Street vendors selling produce near the highway running from Nampo to Kaesong. Image source: Uwe Brodrecht, Oct. 13, 2015, via Commons (CC 2.0). Image has been cropped.

 Although Kim has been incredibly open about economic and food troubles compared to his father, he still has an obligation to strengthen the state, stamp out threats to the regime, and manage the expectations of the people. Those threats include private markets and even a rising standard of living.

The desire to control the markets is more than just about the drive for greater economic control from Pyongyang. Markets form a core part of nearly every DPRK citizen’s daily life. They are a source for networking, sharing gossip (including views that could be viewed as treasonous), and are a key source of electronic devices and digital media that further erode the information cordon that has existed for generations.

Market activity has helped to raise people’s expectations of what a decent life is, and if the government can’t assist in raising standards of living, people tend to decide those in charge are expendable. This threat is why Kim Jong-il, at best, engaged in benign neglect of growing market forces within the country but would not have countenanced anything as dangerous as reform, as reform brought with it its own risks to the stability of the regime.

Kim Jong-un, on the other hand, has calculated that he must allow for reforms, though limited, to continue the country’s economic growth as he has staked a good portion of his legitimacy on improving the economic condition of the country, repeatedly calling out failures and promising a final end to food shortages.

This has created an internal contradiction, where reforms must take place for the people to survive but they must also be applied as sparingly as possible if the regime is to maintain its ultimate authority rooted in the systems created by Kimilsungism-Kimjongilism. To address this, new economic initiatives are often kneecapped to limit their spread and others are announced but never followed up on.

Kim “seems to be doing everything [he] can to keep up Stalinist appearances and…probably believes that he cannot abandon socialist rhetoric without risking his legitimacy,” as Peter Ward told 38 North in December 2017.

Market regulations, agricultural and industrial reforms, changes to how banking and the accumulation of savings work, have all been tweaked over time. And some have had limited success in the places where they’ve been tried, but Kim has yet to commit to anything more than shallow reforms.

One group that has taken advantage of ‘reforms on paper’ is corrupt officials. These individuals, many at high levels of government, are an indispensable cog in the way markets currently work in North Korea. Bribes yield permits and licenses, and further bribes shield entrepreneurs from the more serious repercussions that would otherwise result in their activity. These bribes and kickbacks end up becoming a major source of income for thousands of security officials and bureaucrats, creating an undercurrent pushing markets forward and diminishing any momentum that Pyongyang builds to limit those activities.

The problem of corruption has been publicly discussed by Kim Jong-un more than once, and he has recognized the problems to his regime it creates. How to deal with mismanagement and embezzlement without also crushing the market system that corruption has actually assisted in creating is something yet to be resolved.

Occasionally, large-scale crackdowns are conducted and anyone who gets caught up in them will just have to face reality. But more often than not, on a day-to-day basis, most authorities remained happy to turn a blind eye in exchange for bribes and kickbacks so long as the right signals from Pyongyang existed.

 

After ending the Songun policy and ostensibly fulfilling the goals of Byungjin (by developing miniaturized nuclear weapons), by 2018, Kim Jong-un stated that the Party’s focus should be primarily on economic matters once again.

This didn’t necessarily mean making trade easier. It meant growing the economy while reasserting the state’s control. Nonetheless, the evolution of Pyongyang’s approach to markets from illegality to tacit approval, and to the flirtations with quasi market-socialism that finally seemed to be coming into its own. However, in the final nail to the coffin of Kim being a “Swiss-educated reformer”, his authoritarian streak suddenly became much more pronounced at the onset of the COVID-19 pandemic.

COVID-19 was an obvious threat to the country’s survival as North Korea has one of the poorest healthcare systems in the world and relies on international aid to keep illnesses like tuberculosis in check. At the same time, the strict internal travel regulations and the ability of the state to micromanage huge portions of a person’s life meant that North Korea was also uniquely prepared to enforce lockdowns and quarantine measures, both on a per-city level and could even shut off entire provinces from the rest of the country if it wanted.

But the regime didn’t want to only rely on masks or temporary lockdowns, and it offered Kim a prime opportunity to stem the unpleasant tide of outside information and the further erosion of central authority.

In January 2020 it sealed its borders to levels not seen since the days of Kim Il-sung and began to restrict any cross-border trade or communications using the false threat that the surfaces of objects (even dust) were a major carrier of the virus – it’s not.

Kim Jong-un embarked on two tracks in the wake of COVID-19, constructing a border blockade to stop the virus and using the enhanced security measures to go after other ‘threats’ –  growing markets and increasing levels of outside information.

The blockade has meant the de facto suspension of trade with China as movements across the border were prohibited beginning in January 2020. And it has meant physical barriers in the form of miles and miles of double fencing across a large section of the Sino-DPRK border along with hundreds of new guard posts to secure the fence. It has also taken the form of electronic countermeasures to block cell phone signals, track those making calls into China, and to seek out potential defectors.

The combined effects of this blockade have resulted in around an 80% decline in trade, the country’s only lifeline, and there have been fewer defectors making it to South Korea than at any time since the flow of defectors began in the 1990s.

 

The effect on the markets is both commercial and ideological. Basic necessities are now running out and there is a real risk for nationwide food shortages because trade has been so severely restricted. Kim has also cracked down on electronics and media that are so often found in the marketplace in an attempt to shore up the ideological ‘purity’ of the population.

Stories of imprisonment and even executions for possessing foreign media (particularly South Korean content) have spiked since 2019 and the markets have served as a source of this illicit material since their inception.

Small crackdowns have always occurred, typically in the lead-up to holidays and other important events,  but as COVID has provided an additional excuse, Kim has begun larger and larger crackdowns with more severe punishments. DailyNK has provided numerous reports of these actions including one on December 17, 2021 as part of the regime’s attempt to curb capitalistic ‘disorder’ and to improve the people’s ideological fortitude for the 10th anniversary of Kim Jong-il’s death.

These crackdowns have also been focused on the informal markets that still exist in the streets of many North Korean towns. These are still black markets and aren’t part of officially sanctioned economic activity.

The black markets offer those who can’t afford to pay rental fees the ability to still sell and barter. As the situation within North Korea becomes worse due to the lockdowns, black markets are starting to play an ever-increasing role in people’s lives as the sanctioned markets run out of goods.

As they have been described to DailyNK, “Street merchants are people who get by barely by selling food, water and other goods near railway stations, bus terminals, or markets with a lot of pedestrians…Even among all merchants, they’re the most underprivileged.”

The loss of revenue to these black markets, their inherent threat regarding the spread of outside information and cultural trends, and the fact they’re populated by the more vulnerable population make them an easy target for the regime as the recent crisis grows.

After a few years of expanding freedoms, the experiment with sanctioned market activity seems to be entering a more challenging era. As The Economist stated in July 2019, “state media have called for more central control over investment and jobs in the name of fighting corruption. They also argue for the restoration of state control over the food supply and the revival of the public distribution system.”

Exacerbated by floods, the pandemic has only made the food situation worse, and markets are beginning to run out of products. The situation is so dire that Kim Jong-un himself addressed the matter, calling the food situation “tense” at a meeting of the Workers’ Party, and the United Nations and various NGOs have also been sounding the alarm.

Unfortunately, while the regime could take active steps to alleviate the threat posed by the virus and ease the food shortage, Pyongyang has refused delivery of any COVID vaccines and has expelled every NGO worker in the country, along with almost all foreign diplomatic staff. This makes it impossible for international aid to be distributed. But it also gives Kim the time he needs to finish his anti-reform agenda as the pandemic situation can be described to domestic audiences as just as dangerous as ever, especially in light of new variants.

 

Conclusions

Both common citizens and government officials have used the markets to make fortunes despite of the wide range of government regulations and economic sanctions. Through their informal trade relationships with Chinese partners and the creation of quasi-legal private-public enterprises, North Korea’s economy has been able to not just weather these challenges but has managed to grow (by as much as 4% in 2014).

However, North Korea’s closure of the border with China and Russia and the subsequent halt in trade due to COVID-19 has placed great pressure on the markets and their ability to get goods to the people. Inside sources have long been reporting on shortages of daily necessities like toothpaste and international organizations are anticipating massive food shortages should the border blockade continue much longer. But one thing is certain, after being closed off from the world for over a year, the markets and consumers are ready to reengage in the ground-level capitalism that has sustained the population for a generation…if given the chance.

Under a more liberal approach to economics in the first few years of Kim Jong-un’s rule, the markets continued to grow and standards of living improved as well. But as Kim rediscovers central planning and his love for authoritarianism in the wake of COVID, the condition the market system will emerge after the country reopens is in doubt.

However, as upwards of 50% of North Korea’s GDP is generated by private enterprises, if the regime truly wishes to put an end to market activity, it’s going to have a very difficult time putting the genie back in the bottle. I suggest that it is more likely the government will seek to further constrain the markets but will still recognize their indispensable nature in creating a growing North Korean economy.

Many of Kim’s orders recently have had to do with ideological and social correctness, purging impure elements, and stopping the flow of information – particularly among the country’s youth. He seems less concerned with the dollars (or won) being earned so long as they’re not connected to informational feeds that undermine the state and so long as the state receives its share.

Regardless, until international trade can resume, prices will keep rising and shortages will get worse. The North Korean people have shown themselves to be capable of weathering all manner of difficulties, but there always exists a breaking point. Kim is playing a dangerous game by prolonging the pandemic crisis and attacking market activities as even he doesn’t know where that breaking point is.

Over the years, North Korea has slowly reframed its national identity from one of a Marxist state to an ever more ethnonationalist one, centered on the perceived uniqueness of the Korean people. Kim Jong-un has continued this identity shift, stressing that any reforms made are not capitalistic or even based on the reforms taken in other countries, but are expressions of North Korea doing things “in our own way”.

Perhaps, if he can manage to separate the ideology and identity from the realities that are demanded by economic growth, he may be able to guide the country toward being a more prosperous state without losing the highly centralized authority the regime must keep. Then again, reforms never last long in the Hermit Kingdom and his recent actions do not inspire confidence.

Clearly, the misallocation of resources on things like nuclear weapons and missile tests slows economic growth. And the extremely poor state of the country's electrical grid, transportation systems, and healthcare network means North Korea is, in many ways, still trying to fully recover from the downfall of the 1990s, but economic progress could nonetheless be seen in the crowds of people pouring into markets both old and new. Crowds still gather in the midst of the pandemic as people struggle to maintain their livelihoods, but it seems that the regime is in no mood to help. 

 

~ ~ ~ ~

I have scheduled this project to run through to the end of the year, with a new article coming out roughly every 10 days or so. If you would like to support the project and help me with research costs, please consider supporting AccessDPRK on Patreon. Those supporters donating $15 or more each month will be entitled to a final PDF version of all the articles together that will also have additional information included once the series is finished. They will also receive a Google Earth map related to the events in the series, and can get access to the underlying data behind the supplemental reports.
Supporters at other levels will be sent each new article a day before it’s published and will also receive a mention as seen below.

 
I would like to thank my current Patreon supporters: Amanda O., GreatPoppo, Joel Parish, John Pike, Kbechs87, Rinmanah, and Russ Johnson.


Wednesday, September 29, 2021

Kim Jong-un's First Decade - A Decade of Monument Growth

This is the second of the supplemental articles for the Kim Jong-un's First Decade in Power series. It details the hundreds of monuments built under his rule.


The 20-meter-tall bronze statues of Kim Il-sung and Kim Jong-il standing in front of the mural wall of the Korean Revolution Museum. The statues were unveiled in 2012. Image source: Commons/by Nicor/CC 3.0


Every country has monuments and what they decide to build monuments to can tell you a lot about the place and time in which they were erected, along with, of course, what the country finds important.

North Korea is no different. There are monuments to great battles, the founding of the country, and to important figures in national history. But what makes North Korea different than any other country is both the number and variety of monuments and the government-enforced ideology that goes along with them.

No one is forced to travel to see the Washington Monument, there is no requirement to take full photographs of the Victoria Memorial in London, and even in China people can give voice to a certain level of ideological debate in front of the giant portrait of Mao hanging above the Forbidden City.

While the Juche Tower, Workers’ Party of Korea monument, the giant bronze statues of Kim Il-sung and Kim Jong-il, and the Kumsusan Memorial Palace mausoleum may receive the most photographs and the most mention in the press (whenever the topic arises), those grand edifices only make up part of the crown of North Korean monuments, while there are literally thousands of others that dot the landscape and provide an inescapable reminder that this is solely the nation of Kim Il-sung, his descendants and their ideas.

 

North Korea’s cult of personality surrounding the Kim family had its roots prior to the official formation of the Democratic Peoples’ Republic of Korea in 1948, with the adulation of not only Kim Il-sung but of other revolutionary leaders and anti-Japanese guerillas, but after he became the clear leader of the nation, the cult began to take on new dimensions. In the decades since, it has become tradition for each new generation of Kim to expand the cult of his father while establishing one of his own.

Kim Jong-il secured his position as heir by building up the cult surrounding Kim Il-sung to religious levels and tying the legitimacy of government to the Kim family itself. After Kim Il-sung died in 1994, thousands of tower monuments to his “eternal life” were erected in every town and village. And from there, the physical and permanent manifestations of the cult were impossible to miss no matter how rural the area.

However, Jong-il allegedly told officials that he didn’t want massive or hundreds of monuments built to him while he was alive and while the people were still struggling with food shortages. While this would give him the image of a caring leader, more concerned about the peoples’ needs, it is also just as likely that he wanted to avoid internal dissent as the masses would be required to help fund and build monuments to a living “supreme leader” all while the state routinely failed to provide adequate food, medicine, and shelter to millions.

Regardless of the real reasons, it did set a precedent. The bulk of monuments relating to Kim Jong-il during his lifetime are those erected at factories and other locations that he visited while giving “on the spot” guidance tours, they aren’t mega statues.


Kim Jong-un has maintained this tradition.

Prior to Kim Jong-il’s death in December 2011, there were at least 10,000 stone and bronze monuments in North Korea. The vast majority were dedicated to Kim Il-sung while a small but important minority had been erected to Kim Jong-il and to his activities, as well as few in honor of other members of the family.

After his death, particularly between 2012 and 2016, Kim Jong-un embarked on a major construction program to enlarge Jong-il’s cult and to help establish his own. In keeping with tradition, permanent monuments to the living leader are less numerous than the ones built in honor of the previous one.

As such, Kim Jong-un replaced every mural of Kim Il-sung in the center of each county seat with a set of joint mosaic murals, each now featuring Kim Il-sung and Kim Jong-il. He also ordered that the text on every Tower of Immortality be modified to include the now “eternal general” Jong-il (to go along with the “eternal president” Kim Il-sung). To understand the scope of that change, it required alterations to at least 5,260 Towers.

The massive Mansudae bronze statue of Kim Il-sung in Pyongyang was also replaced with a new one, now joined by a statue of Kim Jong-il. The smaller bronze statues in each provincial capital were likewise replaced with the pair of them.

Smaller monuments dedicated to locations where Kim Jong-il had visited or gave “revolutionary guidance” in the last year of his life were also erected after his death.

Bronze statues of Kim Il-sung and Kim Jong-in on horseback on the grounds of the Mansudae Art Studio. Image source: Commons/by Nicor/CC 3.0

One of the grand monuments constructed under Kim Jong-un in honor of his ancestors is the bronze statues of Kim Il-sung and Kim Jong-un riding horses on the grounds of the Mansudae Art Studio. The studio is the only organization with permission to depict the Kim family and they are responsible for every important statue and mosaic mural of the Kims in the country.

The monument depicts Kim Il-sung on horseback, both the man and the horse exuding confidence and stability. Next to him is Kim Jong-il, his horse almost bursting with energy as the Dear General led the country “forward” and “applying his unique 'military first' policy to turn our country into an invincible one that can never be defeated and has a nuclear deterrent in the face of the deadly pressing offensive of imperialists,” in the words of Kim Yong Nam who served as President of the Presidium from 1998 to 2019.

Unveiled in 2012, the monument was cast and finished in just two months according to North Korean sources and was one of the very first major works to show Kim Jong-il.

With Kim Jong-un having solidified his link to past leaders and sufficiently glorified them, he also began work on his own cult. As statues of himself are taboo, the first glimpse of his megalomania was seen in the 560-meter-long slogan sign on the hill overlooking the Samsu Hydroelectric Dam. Declaring, “Long live Songun Korea's General Kim Jong Un!” the sign was actually built before his official transition was over. A decade later it still stands, the only change being to reflect his own changes in policy; the word “Songun” has been replaced with “Juche”.

 

The locations of monuments in and around the city of Sariwon. Based on research done for the AccessDPRK project.

 

In all, under the rule of Kim Jong-un, the AccessDPRK project has located 867 monuments that were built from 2012 onwards. This represents 7.3% of all monuments in the country and new ones are erected every year.

Of that number, 31 are joint statues and 281 are joint murals. There are also at least 5,260 Towers of Immortality in the country. And aside from the alterations to the thousands of existing Towers, Kim has had a further 103 erected around the country.

In addition to the 867 that are currently known to have been built by Kim Jong-un, scores of others (in addition to the Towers) were renovated or remodeled in some way.

 

The 312 joint statues and joint murals are indeed new monuments, but most (a few were totally new constructions) were additions to sites that had already existed prior to Kim Jong-il’s death. Of the other ones, new Towers, new guidance commemorations, new murals of other kinds, for which I have a certain year of construction, there were 25 totally new monuments built in 2012, 36 built in 2013, 56 built in 2014, 55 built in 2015, 87 built in 2016, 82 built in 2017, 73 built in 2018, 52 built in 2019, 16 built in 2020, and two are known to have been built in 2021. Once satellite images are updated for other parts of the county, the 2020 and 2021 figures will certainly rise.

All of this new construction means that there are at least 11,755 monuments in North Korea. And between building new ones and renovating existing monuments, I estimate that at least $1 million a year on average is spent on this aspect of the personality cult. There have been tremendously greater expenses in the past (such as the Kumsusan Memorial Palace), but those are relatively few and far between.

Another way to quantify the scope of monuments in North Korea is to look at how much land they occupy. After doing a representative survey of the different types of monuments, totaling 10% of all monuments in the country, I estimate that the paved (e.g. non-landscaped) area of all of the monuments in the country occupies approximately 350 combined acres of land. Another way to look put it, is that they take up the same amount of land as 198 standard UK football pitches. However, if you were to add in the landscaping and wider public parks dedicated to key members of the family, the total area of the country involved in commemorating the Kim’s grows considerably. The land area of the Kumsusan Memorial Palace alone is nearly 90 acres and there’s over 80 acres dedicated to the Kims in the city of Hoeryong. 

 

While knowing that acres and acres of land are being used to glorify such a family instead of being used for better purposes helps us conceptualize the scope of monumental construction, knowing the types, numbers, and dates of construction does offer additional benefits for those interested in the topic.

The vast majority of guidance visits are publicized in DPRK media, but they are vague on the exact locations of the places visited. So, we can correlate the construction dates of monuments and their types to then help identify the locations of formerly unknown places, as these smaller commemorative monuments are usually built within a few months to a year of the visit. A good example of connecting monument construction with Kim visits can be seen in the elite KPA Farm No. 1116, where monuments and a museum have been built in response to multiple visits by Kim Jong-un.

The edification of the Kim family goes well beyond stone monuments in village squares. There are hundreds of museums in the country, many of which have been renovated under Kim Jong-un. From the expansion of the Korean Revolution Museum to the reconstruction of the Sinchon Museum of American War Atrocities, scores of buildings that either directly enforce the ideologies of Kim Il-sung and Kim Jong-il or that promote the regime’s narrative of history have either been remodeled or placed under construction.

With monuments in every village and scattered throughout larger towns to the Juche ideological study halls to Kimilsungism-Kimjongilism rooms inside of high schools, and to revolutionary museums being located in every county seat, no one is far removed from visible reminders that North Korea is Kim’s Korea.

Add to this that the only official sources of information come from the state and that the regime has taken great steps under Kim Jong-un to limit outside information from breaking the ideological blockade, this layered approach to propaganda bolstered by a decade of new monuments has continued to shape the world view of 25 million people and it will be a monumental task in itself to overcome three generations of indoctrination if reunification ever comes.

 

~ ~ ~ ~

I have scheduled this project to run through to the end of the year, with a new article coming out roughly every 10 days or so. If you would like to support the project and help me with research costs, please consider supporting AccessDPRK on Patreon. Those supporters donating $15 or more each month will be entitled to a final PDF version of all the articles together that will also have additional information included once the series is finished. They will also receive a Google Earth map related to the events in the series, and can get access to the underlying data behind the supplemental reports.

Supporters at other levels will be sent each new article a day before it’s published and will also receive a mention as seen below.

 

I would like to thank my current Patreon supporters: Amanda O., GreatPoppo, Joel Parish, John Pike, Kbechs87, Rinmanah, Russ Johnson, and ZS.

--Jacob Bogle, 9/28/2021


Wednesday, September 1, 2021

Kim Jong-un's First Decade - Gassing Up the Country

This is the first of the supplemental articles for the Kim Jong-un's First Decade in Power series. It deals with vehicle ownership, the supply of fuel, and sanctions avoidance issues.

Photograph of the Pyongyang-Kwanmun gas station via Wikimapia.

Introduction

I have written about this topic more than once as it intersects with multiple areas of research, but one thing that has been made clear is that the rise of the modern gas station within North Korea and changes toward ‘car culture’ have largely been a product of Kim Jong-un’s rule.

Thanks to the publication of the AccessDPRK 2021 Pro Map and newer Google Earth imagery for most towns in North Korea, I can now provide the most detailed picture yet of the country’s fueling infrastructure; a picture that has been largely painted in Kim Jong-un’s first decade in power.

Of the 157 gas stations that I have found, 149 of them have known construction dates. And of those, 63.8% were constructed since Kim Jong-un came to power. Additionally, four of the six stations whose exact year of construction isn’t known were at least constructed on or after 2012, meaning that two-thirds of all gas stations have been built in just the last decade.

While gas stations may not seem like an important topic, in the context of North Korea, they become a window into the country’s economy and reforms as they sit at the nexus of the growth of vehicle ownership, car culture, fuel imports, and sanctions avoidance activities.

To service an ever-larger vehicle fleet, whether they’re state-owned or private, easy to access fuel needs to be made available. And to keep those gas stations operational, a steady supply of refined petroleum must also exist.

To cover this issue, this article will be broken down into three main topics: vehicle ownership, gas station construction, and fuel supply and sanctions.

 

Vehicle Ownership & Car Culture

This is the Peokkugi I Series from North Korea's own Pyeonghwa Motors. Its design is heavily influenced by the Fiat Doblo. Image via Pyeonghwa Motors sales brochure.

The streets of Pyongyang, a city of 3 million, are famous for not being full. Traffic jams are rare and brief, and most people get around by subway or tram service. Outside of the capital, most people have to walk or ride a bicycle. If they have a few extra won, they can jump on the back of a farming truck or military vehicle to make their way. Long journeys are predominantly taken via train.

So it might be surprising for many to know that North Korea has its own automobile industry, of sorts. While North Korea has been producing various vehicles since 1958, it wasn’t until the 2000s that they started to take the idea of manufacturing non-commercial passenger vehicles seriously. 

Established in 2000 as a joint venture with the South Korean-based Unification Church as part of the South’s Sunshine Policy at the time, Pyeonghwa Motors was meant to usher in a new era of not only economic cooperation between the two countries, but also to help fulfill Pyongyang’s desire to have a robust automotive industry.

Pyeonghwa’s plant in Nampo has a nominal capacity of 20,000 cars a year, yet, in most years fewer than 1,000 vehicles were manufactured. Its peak was in 2011 when 1,820 units were made. And like the products of North Korea’s other vehicle plants, their creations are largely Chinese-manufactured, DPRK-assembled car/truck/bus kits. The few models that are predominantly manufactured within the country are merely modified copies of foreign vehicles and still require many foreign parts.

However, even if North Korea has yet to develop its own truly domestic and indigenous car manufacturing base, tens of thousands of cars, trucks, and buses on North Korean roads come from North Korean factories, and they are in enough numbers as to make up a sizable percentage of North Korea’s entire vehicle fleet. What’s more, the regime has managed to import a number of vehicles over years. Along with the increasing privatization of transportation services (a reported 6,000 taxis are in Pyongyang alone) this has all helped keep urban populations moving.

Regulations were relaxed in 2017 to allow for more car registrations, as most passenger vehicles were still technically owned by state enterprises and lent or leased out. Compared to the annual income of North Koreans, prices are still prohibitively expensive, ranging from $10,000 to $30,000 for most models, but it is estimated that 20% of Pyongyang families now have their own cars thanks to a growing middle class.

As mentioned, an alternative to outright ownership is “leasing” them from a state firm. According to DailyNK, this involves “The owner of the car must pay 150,000 KPW to the enterprise for using their name and to make a working record, and also needs to pay 50,000 KPW each month to the Security Department for a license. In addition, they’ll have to pay more than 300,000 KPW in bribes for various reasons”.

Despite supply challenges and the fact that cars are still a major luxury, the regime has taken steps to normalize driving and to familiarize the next generation with car culture, perhaps in anticipation of broader car ownership in coming years.

In 2017 the government began to build children’s “traffic parks” which are miniaturized city blocks with fake buildings, streets, street signs, and even bridges. Kids are given mock cars to drive (pedal) around with and learn the rules of the road. Most towns have at least one of these parks while a few have had their construction delayed. In total, the AccessDPRK database has located 149 driving parks.

These reforms and other changes also mark a change in ideology, where having your own car isn’t just a decadent part of Western capitalism but can be something to which citizens are implicitly told they can finally aspire to. But to accomplish this, ready access to fuel is needed.

 

Gas Station Construction

This graph shows the number of identified gas stations constructed each year from 2012 to 2020. It is based on the data found within the AccessDPRK 2021 Map, Pro Version

Unlike in basically every other country on earth, getting fuel (gasoline or diesel) in North Korea has typically been restricted to those operating state-owned and military vehicles. People would get rations or would otherwise need to get permission from their factory, farm, or other work unit. From there, the fuel would have been distributed either from basic fuel tanks on site or would need to come from centralized fuel distribution centers that would send out fuel as needed. An example of one of these large depots can be found at 39.094342° 125.615611°.

Every town had fuel, but the concept of a western-style gas station was mostly unknown, and I have only been able to locate 54 in the whole country that existed prior to 2012. While the centralized supply of fuel seems to have been adequate for most of the country’s history, it was simply too complicated and the sites too remote to be responsive to the increase in private vehicle ownership and in taxi and bus companies.

As the graph above shows, and corresponding with Kim Jong-un’s assumption of power, there was a marked increase in the number of gas stations being constructed each year from six 2012 to a peak of twenty-two in 2017. And while the growth rate peaked in 2017, newly built gas stations have shown up every single year. Additionally, many of the older sites have been renovated and expanded within the same time frame.

While the beginnings of vehicle ownership and the establishment of taxi companies began years earlier, there is no debate that this switch to a more modern system of gas distribution has taken hold and was driven by the Kim Jong-un regime.

Of course, this reform wasn’t done altruistically to make driving around the country easier. The state issues permits for gas station construction and state-owned companies have also been involved in the establishment and operation of new sites, likely resulting in considerable annual revenue. One of the most well-known cases of state ownership is the Air Koryo gas station in Pyongyang’s Kangan District.

Since 2015, the state airline has been trying to diversify itself and may operate several others gas stations. They also run a taxi service and a food company. As NKNews notes, Air Koryo is owned by the military and so these businesses are not only an attempt to gain revenue for the government but for the military in particular.

This image shows two gas stations. The smaller one has existed since before 2004 while the larger facility was constructed from 2012-2014. The smaller station only provides fueling services, but the larger station also has a vehicle maintenance facility. Note: the numerous small, temporary structures in the image are related to a major building project on Saesalim Street, Sadong District.

In terms of design, many of the gas stations are stand-alone structures that only provide fuel and perhaps small consumer goods like snacks or phone cards, which most people around the world would find recognizable. Others are part of larger facilities that include vehicle maintenance services for commercial and passenger vehicles.

In a country where most vehicles are still used for industrial purposes (materials transport, dump trucks, etc.) and where constant vehicle maintenance is required, as most vehicles are decades old, clusters of these stations are occasionally created to handle the demand.

An example of this can be seen at the Potonggang Reservoir in Pyongyang where there are three distinct fueling and maintenance facilities next to each other.

However, despite the clear rise in the number of gas stations, a vision of long highways with gas stations dotting the landscape or where there’s one on every corner in town is still a distant one. South Korea has an estimated 11,800 gas stations. Even when considering the South’s larger population and economy, the fact that North Korea has fewer than 200 is a stark reminder of how far the country must go to eventually become a nation that caters to the driver.

There are very few gas stations along the country’s highways. Along the major Reunification Highway, for the nearly 100 km distance between Sariwon and Kaesong there are no evident gas stations. And in the country’s interior regions there aren’t any of the modern sites outside of major towns. Drivers must rely on the old method of getting refueled and would be well advised to carry an emergency supply of gas with them.

Indeed, the decades of fuel scarcity led to the adoption of wood gasification in countless vehicles. And while modern gas stations are spreading, they still remain largely confined to major cities – particularly those cities involved in international trade. The seven cities of Pyongyang (47), Sunchon (10), Rason (8), Chongjin (7), Hamhung (7), Nampo (6), and Sinuiju (6) hold nearly two-thirds of all gas stations in the country.


Fuel Supply, Sanctions, and Sanctions Avoidance

It is important to note that while gas stations have spread around the country, most places still rely on the more traditional way of getting fuel into vehicles. These fueling compounds can be found all over the country and many have been renovated over the years. This implies that the new gas stations built in the last decade have not merely been replacing an existing system, but that they are creating a net increase in demand.

This need for more petroleum supplies has been demonstrated by the expansion of the Nampo fuel terminal and the construction of storage tanks in other parts of the country as well. In Nampo, since 2018 more than 30 storage tanks have been added or are under construction. 

As North Korea lacks any natural oil reserves, the United Nations has placed sanctions limiting how much it can import as a result of its nuclear and missile programs. This sanctions regime only allows for 500,000 barrels of refined petroleum and 4 million barrels of crude oil products to be imported each year.

To get around sanctions, North Korea has been employing ship-to-ship transfers (STS) and then brings their newly loaded vessels into a home port to offload the illegal petroleum products. Each transfer can provide North Korea with anywhere from 500,000 to over 1 million liters of oil (6,289 barrels).

Based on United Nations reporting and using publicly available ship tracking data, there are six primary vessels engaged in STS activities along with several smaller vessels. Each ship can make numerous transfers a year. In 2020, the US found 32 individual instances of fuel being smuggled to DPRK ships within Chinese waters, while the Chinese government was alerted by the UN to 46 instances of smuggling activities via STS.

All of this adds up to a lot of fuel coming into the country. According to the 2020 UN Panel of Experts report, the US estimates that “under the one-third laden scenario, these deliveries would have amounted to almost three times the total cap of 500,000 barrels set in paragraph 5 of resolution 2397 (2017). Under the half-laden scenario, the deliveries would have amounted to more than four times the cap and, under the fully laden scenario, they would have amounted to almost eight times the cap.” (emphases added)

But ship-to-ship transfers aren’t the only way North Korea can get illicit petroleum. There is an aging but still operational pipeline from China that is owned and operated by China National Petroleum Corp. North Korea’s only functional oil refinery, the Ponghwa Chemical Factory, is also located nearby, enabling them to convert crude oil from the pipeline into other needed products.

While China is party to the UN sanctions against North Korea, enforcement of those sanctions is left up to each member state, and the pipeline is not monitored by independent organizations.

In 2016, an estimated 270,000 tonnes (36,800 barrels) of fuel – both gasoline and diesel – was transferred to North Korea through the pipeline according to official Chinese data. A further 520,000 tonnes (70,900 barrels) of crude oil was also sent. However, customs data isn’t always made available and it has been notoriously unrealizable. What’s more, is the pipeline’s ability to transfer not just crude oil but refined products as well. At full flow, it could send eight times North Korea’s annual legal allotment.

2020 report by The Nautilus Institute reveals that oil transfer via pipeline is still ongoing through this COVID-era, even if other import methods have temporarily been restricted. Its authors estimate that crude oil exports by the Dandong-Sinuiju Pipeline from China in 2019 came to 715,000 tons (approx. 5.2 million barrels), but increased those exports to nearly 750,000 tons (almost 5.5 million barrels) in 2020 – far in excess of UN limits.

The current trade restrictions imposed by Pyongyang due to COVID has likely impacted a range of smuggling activities, but it seems rather clear that North Korea has the networks of ships, allies, and infrastructure to routinely surpass international limits.

And the operation of gas stations is one key to realizing that fact.

Satellite imagery exists of many of the gas stations during different phases of construction. Through these images one can see that each gas station typically has 2-4 (sometimes more) fuel storage tanks. But to err on the side of conservative estimates, I will use two tanks as the average.

Using measurements attained from “Wonsan Station #2” at 39.142021° 127.385198°, I estimate that each fueling tank has a capacity to store 7,733 gallons (184 barrels) of gasoline. If we assume that all of the 103 identified gas stations built in the last decade have the same sized tanks, only have two of them, and are refilled only once a month, then the demand for additional fuel products has risen by 19,115,976 gallons (455,142 barrels) each year of refined petroleum. That’s almost the country’s entire legal import limit just to operate these new gas stations and is based on using conservative estimates.

Busier stations will need more. Numerous gas stations have 4+ storage tanks. Some tanks are larger. Therefore, the actual supply needs could easily be greater.

There are still the other 54 older gas stations, there’s still the centralized distribution network that those in rural areas rely on, there’s still the need for aviation fuel, heavy fuel oil, and the need for supplies for their fishing fleet and military vehicles.

Of course, their refinery can produce refined products, but the point is that nearly half a million barrels of gas is now – newly – in demand, a demand that has not been accounted for by adjusting sanctions levels. A demand, it seems, that can only be realistically met through illicit imports.

~ ~ ~ ~

I have scheduled this project to run through to the end of the year, with a new article coming out roughly every 10 days or so. If you would like to support the project and help me with research costs, please consider supporting AccessDPRK on Patreon. Those supporters donating $15 or more each month will be entitled to a final PDF version of all the articles together that will also have additional information included once the series is finished. They will also receive a Google Earth map related to the events in the series.

Supporters at other levels will be sent each new article a day before it’s published and will also receive a mention as seen below.

 

I would like to thank my current Patreon supporters: Amanda O., GreatPoppo, Joel Parish, John Pike, Kbechs87, Rinmanah, Russ Johnson, and ZS.

--Jacob Bogle, 9/1/2021