North Korea even more enigmatic on closer look

NORTH KOREA: As North Korea's reclusive leader, Kim Jong-Il, pays a rare visit to Beijing, Tim Judah pays an equally rare visit…

NORTH KOREA: As North Korea's reclusive leader, Kim Jong-Il, pays a rare visit to Beijing, Tim Judah pays an equally rare visit for a Western journalist to the secretive country

For fifteen minutes you move silently along airport-style travelators. Eventually you reach the goal. The "Great Leader", the man who is still officially North Korea's president even though he died in 1994, lies in a glass case at the dark and sombre centre of the mausoleum. North Koreans bow silently four times and, as they leave the tomb of Kim Il Sung, women wipe away their tears.

In the next rooms of the vast Kumsusan Palace visitors view with reverence Kim Il Sung's railway wagon, his Mercedes 600 SEL and his honours from all over the world. His Yugoslav Great Star for example, and his 1984 award of honorary citizenship of Belgrade.

This country did not earn its nickname of the "hermit kingdom" for nothing. For almost 60 years North Korea has lived in isolation from the rest of the world, its people sealed inside this conservative country, with few foreigners ever allowed in. But now, long after the collapse of communism virtually everywhere else, a kind of super-timid glasnost and persestroika have started.

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For example, inside Pyongyang's covered Tongil market throngs of people crowd round stalls selling televisions, clothes, food, cosmetics and all sort of other things. It is a private market and until last October it did not even exist.

It sells many things which are unavailable in state shops - which in fact means all shops. Economic reforms began in July 2002 and while markets have been made legal, this does not mean that the government of Kim Jong Il, the son of Kim Il Sung, is about to allow anything so radical as a private shop.

Pyongyang is a city of high-rise blocks with few cars but lots of people walking. In the centre of town security men guard a gate to the area known by foreigners as the "Forbidden City." This is where top party people live. At night, parts of the city are blacked out because this country suffers from chronic power shortages.

The economic reforms begun by the government decreed that subsidies to state-owned enterprises were to be withdrawn, workers would be paid according to how much they produced, farmers' markets, which had hitherto been tolerated, would become legal and state enterprises could also now sell (non-food) products in markets. Wages and prices were also put up.

The frustrating thing now is trying to assess the success or failure of these reforms. Even the simplest of statistics are unavailable. For example, Prof Li Gi Song, a senior economist at Pyongyang's Academy of Sciences, says he does not know the rate of inflation.

Or maybe he is not telling. After all, he says: "We can't publish all the figures because we don't want to appear bare before the United States. If we are bare then the US will attack us like Afghanistan or Iraq."

It is clear that the reforms are having a major impact on society but what this means for the future is unclear. Most people rely on a state rationing system to get staple food. But it is not enough and food in the private markets is expensive.

Since North Korea does not want to have anything to do with the "imperialist currency" of the United States, all foreign transactions are in euros. Officially €1 is worth 171 North Korean won. In fact, at the semi-official exchange rate, it is worth more like 1,400 won.

A waitress in a Pyongyang restaurant earns in the region of 2,200 won a month. A mid-ranking government official earns 2,700 won. A worker at a state farm earns in the region of 1,700 won, a kindergarten teacher 1,700 won and a pensioner gets between 700 and 1,500 won. A seamstress in a successful factory with export contracts can earn 5,000 won.

Accommodation, healthcare and schooling are free and in Pyongyang officials get double food rations to everyone else, but still, there is a mystery here.

With such tiny wages how do so many people seem to have the money for (imported) televisions in the Tongil market which cost some 72,000 won? And what about other items? An average North Korean made man's jacket costs 4,500 won. Who has such money if most people are earning 2,700 won a month?

And here is another mystery. Pyongyang is full of restaurants and they are often full. The food is good too. But again, the price of a meal is an average month's salary.

Clearly, an unknown number of North Koreans have access to foreign currency, especially those with family in Japan or South Korea. Some people are making money too, either because they are getting paid more or because they are doing some sort of business. But who is driving the Mercedes and yakking into mobile phones? Foreigners are obliged to leave theirs at the airport.

Foreign journalists are accompanied by government minders at all times when they visit North Korea - and mine admitted that the question of who had money was "a riddle".

"Write good things about us first and then we will allow you back and then we'll tell you," he said.

Diplomats and aid workers say that they have noticed a large number of new enterprises opening over the last year. Nominally they are state-owned but sometimes they have a foreign partner, often an ethnic Korean from Japan. Some of the answer may lie here.

Thanks to the July 2002 reforms, these firms have an autonomy they never could have dreamed of before.

Indeed they often appear to operate as private companies would, with directors having the authority to do whatever they like with any profits. Being part of the state system may well mean large profits thanks to securing monopolies. Autonomy means that directors realise they need a nice (company) car and a mobile phone.

So who is winning and who is losing thanks to reform? Civil servants, especially those outside of Pyongyang who do not get double food rations and have no way to increase their productivity, are finding it hard to make ends meet.

Winners include farmers who can sell any surpluses on the open market. But two thirds of North Koreans live in towns and cities and only 18 per cent of the country is suitable for agriculture.

A large proportion of North Korean industry is obsolete. Most of Pyongyang has electricity most of the day. Much of the rest of the country does not. Despite talk of a high-tech revolution, the country is not connected to the internet, though some do have access to an e-mail only service. Foreigners talk of a "rust belt" of collapsing heavy industrial plants in the east of the country. What has happened to the people who work there?

The answer, it seems, is that huge but unknown numbers of people have been redeployed into agriculture. Every scrap of available land is being cultivated. How much former industrial workers make on the land is also unknown.

More and more workers are needed in agriculture because there is virtually no power for threshing and harvesting, no diesel for farm vehicles and so more and more work has to be done by hand. Ox-carts are a common sight.

While markets are everywhere now, this does not mean that there is enough food everywhere. In Pyongyang there is an ever-increasing supply of consumer goods. In state shops there is some food but no meat or vegetables. Outside of the capital there appears to be less.

No one knows how many died during the famine years of 1995-1999. The figures vary from anything between 200,000 to 3,000,000. In the little town of Pukchang, 100 kms north of Pyongyang, officials say that 5 per cent of their children are still weak and malnourished.

In Hoichang, 60 kms west of Pyongyang, the figures given by schools and institutions to the UN's World Food Programme indicate a figure of around 10 per cent. According to Masood Hyder, the senior UN official in North Korea, vulnerable households, a large but unknown proportion of the population, now spend up to 80 per cent of their income on food. The WFP is helping to feed 6.5 million people out of a total of 23 million.

Things are better than they were. Two surveys carried out in 1998 and 2000 by the North Korean government together with the WFP and Unicef showed a dramatic improvement in children's health between those years.

The data showed that "stunting", that is to say children not reaching their proper height, dropped from 62.3 per cent to 39.2 per cent. The figures would be better now if a new survey were to be carried out. Still, according to Unicef, children may not be dying of hunger but they are still dying of diarrhoea and respiratory diseases as a side-effect of malnutrition.

To the eyes of a European, a class of eleven-year-olds, in other words those who were very young at the height of the famine, in Hoichang is a shocking sight. They look like seven-year-olds. Those who have been worst affected by malnutrition look like five-year-olds.

According to Ri Gwan Sun, their teacher, the worst affected in past years still suffer from the long-term effects of malnutrition, quite apart from their height. In sports she says they struggle to keep up.

"They are prone to flu and pneumonia and their immunity is not as strong. They are slower at learning than others."

Pierrette Vu Thi, of Unicef, says that North Korea's poor international image makes it hard for her agency, the WFP and others to raise all the money they need. "The country is in a chronic state of emergency," she says, and "to get it back on its feet would require a reconstruction effort on the scale of Afghanistan and Iraq."

Such bleak talk is echoed by Eigil Sorensen of the UN's World Health Organisation. Outside of the capital, he says, health services are "extremely limited."

Medicines and equipment are in short supply, large numbers of hospitals no longer have running water or heating and the country has no capacity to handle a major health crisis.

With no end in sight to the nuclear stand-off between North Korea and United States, the US will maintain sanctions on the country. Japan also has sanctions on North Korea.

A recent US State Department report said it was "highly likely" that the country produced and sold heroin and other narcotics abroad as a matter of state policy. North Koreans who have fled claim that up to 200,000 people are in labour camps.

Such stories are dismissed as fabrications by officials such as Thae Yong Ho of the Foreign Ministry. He says: "There are no labour camps and there are no state-sponsored human rights abuses."

Change has begun in North Korea. It is substantial, given North Korea's starting point. But it also seems likely that unless it breaks the deadlock with the US and cleans up its image, the country will remain in isolation.

But, without more opening to the outside world, internal reform alone cannot truly transform the country's economy and thus radically improve the lives of most of its citizens for the better.

Some foreign investment is already here and more may well come, for example in the Kaesong special economic zone on the border with South Korea, but hardly enough to modernise the whole economy.

North Korean officials say they know this but that the US is trying to "stifle" their country. And in that they may well be right.

In this conservative communist hold-out, there are no signs of political dissent but, especially outside Pyongyang, there is a distinct feel of glasnost in the air.

Asked whether those who could not make more money thanks to the reforms were angry with the government, an official in Hoichang replied: "Everybody knows the condition of our country. . . So, though things are difficult, they believe that some day they will produce more and earn more. So, at this point, nobody is angry with reform." At this point?