Editing Economy of North Korea (section)

====Crisis and famine====
{{Main|North Korean famine}}
From 1994 to 1998, North Korea suffered a famine. Since North Korea is a closed country, the number of specific deaths in the incident is difficult to know. According to different literature, the starved or malnourished death toll is estimated to be between 240,000 and 480,000. Since 1998 there has been a gradual recovery in agriculture production, which by 2013 brought North Korea back close to self-sufficiency in [[staple food]]s. However, as of 2013, most households have borderline or poor food consumption, and consumption of protein remains inadequate.<ref name="FAO-WFP-2013"/>

In the 1990s, the North Korean economy saw stagnation turning into crisis. Economic assistance received from the Soviet Union and China was an important factor of its economic growth. Upon its collapse in 1991, the Soviet Union withdrew its support and demanded payment in hard currency for imports. China stepped in to provide some assistance and supplied food and oil, most of it reportedly at concessionary prices.{{Citation needed|date=January 2008}} The North Korean economy was undermined and its industrial output began to decline in 1990. Deprived of industrial inputs, including fertilizers, pesticides, and electricity for irrigation, agricultural output also started to decrease even before North Korea had a series of natural disasters in the mid-1990s. This evolution, combined with a series of natural disasters including record floods in 1995, caused one of the worst economic crises in North Korea's history. Other causes of this crisis were high defense spending (about 25% of GDP) and bad governance.

In December 1991, North Korea established a "zone of free economy and trade" to include the northeastern port cities of Unggi ([[Sonbong|Sŏnbong]]), Ch'ŏngjin, and Najin. The establishment of this zone also had ramifications on the questions of how far North Korea would go in opening its economy to the West and to South Korea, the future of the development scheme for the [[Tumen River]] area, and, more important, how much North Korea would reform its economic system.<ref name="Savada1994"/>

North Korea announced in December 1993 a three-year transitional economic policy placing primary emphasis on agriculture, light industry, and foreign trade. However, lack of fertilizer, natural disasters, and poor storage and transportation practices have left the country more than a million tons per year short of grain self-sufficiency.<ref name="Bloomberg2016">{{cite web|last1=McFerron|first1=Whitney|title=North Korea Food Supply Imperiled by Drought, UN Says|url=https://www.bloomberg.com/news/articles/2016-04-27/north-korea-s-food-supply-imperiled-by-water-shortages-un-says|website=Bloomberg.com|access-date=February 23, 2017|archive-url=https://web.archive.org/web/20160710111621/http://www.bloomberg.com/news/articles/2016-04-27/north-korea-s-food-supply-imperiled-by-water-shortages-un-says|archive-date=July 10, 2016|date=April 27, 2016|quote=North Korea's already-low food supplies are about to get worse after poor rainfall in the past year slashed the nation's critical rice crop, the United Nations said.  At least 70% of North Korea's population, or about 18 million people, already rely on the government as their main source of food grain and for months has received well below the targeted daily ration, UN's Food & Agriculture Organization said in a report Wednesday. The country will need to import almost 700,000 metric tons of grain to meet its needs this year, but government purchases are only expected to reach 300,000 tons, the report said.}}</ref><ref name="UPI2016">{{cite web|last1=Shim|first1=Elizabeth|title=North Korea's food shortage grows but elites remain unaffected, Seoul says|url=http://www.upi.com/Top_News/World-News/2016/09/27/North-Koreas-food-shortage-grows-but-elites-remain-unaffected-Seoul-says/4001474997303/|website=UPI.com|access-date=February 23, 2017|archive-url=https://web.archive.org/web/20170120044413/http://www.upi.com/Top_News/World-News/2016/09/27/North-Koreas-food-shortage-grows-but-elites-remain-unaffected-Seoul-says/4001474997303/|archive-date=January 20, 2017|date=September 27, 2016|quote=In 2014, North Korea's food shortage was estimated to be 340,000 tons and 407,000 tons in 2015. In 2015, North Korea's grain production was hit heavily by a drought. A lack of fertilizer and other resources could have also contributed to the deficit, according to the report.}}</ref> Moreover, lack of foreign exchange to purchase spare parts and oil for electricity generation left many factories idle.<ref name="RandPark2010Dissertation">{{cite web|last1=Park|first1=Ki-Tae|title=Analyzing North Korea's Decision-Making Process on its Nuclear Weapons Programs with the Rational Choice and Cognitive Choice Models|url=http://www.rand.org/content/dam/rand/pubs/rgs_dissertations/2010/RAND_RGSD268.pdf|website=Rand.org|publisher=Pardee Rand Graduate School|access-date=February 23, 2017|archive-url=https://web.archive.org/web/20130310231533/http://www.rand.org/content/dam/rand/pubs/rgs_dissertations/2010/RAND_RGSD268.pdf|archive-date=March 10, 2013|date=2010|quote=This severe shortage of oil imports and coal production provided the first phase of vicious cycle of economic recession by getting industrial factories idle in the first place. Pyongyang, in return, could have not produced export merchandize enough to earn foreign reserve due to the low operation rates of its factories and lack of raw materials, thereby significantly reducing its foreign reserve acquisition. The lack of foreign exchange reserves again caused the shortage of oil import and then the oil shortage made its amount of agricultural product diminish sharply due to the inability to use its machinery and artificial fertilizers, most of which are highly dependent on oil and coal consumption in their production.}}</ref>

The 1990s famine paralyzed many of the Stalinist economic institutions. The government pursued Kim Jong Il's ''[[Songun]]'' policy, under which the military is deployed to direct production and infrastructure projects. As a consequence of the government's policy of establishing economic self-sufficiency, the North Korean economy has become increasingly isolated from that of the rest of the world, and its industrial development and structure do not reflect its international competitiveness. Domestic firms are shielded from international as well as domestic competition; the result is chronic inefficiency, poor quality, limited product diversity, and underutilization of plants.{{Citation needed|date=January 2008}} This [[protectionism]] also limits the size of the market for North Korean producers,<ref name="Savada1994"/> which prevents taking advantage of [[Economy of scale|economies of scale]].

North Korea, led by Kim Jong Un, declined external aid for flood recovery, relocating 15,400 displaced people to Pyongyang while emphasizing self-reliance. Despite offers from Russia, China, and others, the North has chosen to manage the crisis independently.<ref>{{cite news |title=Thousands of flood victims will be brought to capital for temporary care, North Korean leader says |date=10 August 2024 |url=https://www.washingtontimes.com/news/2024/aug/10/thousands-of-flood-victims-will-be-brought-to-capi/ |archive-url=https://web.archive.org/web/20240811204147/https://www.washingtontimes.com/news/2024/aug/10/thousands-of-flood-victims-will-be-brought-to-capi/ |archive-date=August 11, 2024 |access-date=12 August 2024 |url-status=live }}</ref>


The food shortage was primarily precipitated by the loss of fuel and other raw materials imports from China and the Soviet Union which had been essential to support an energy intensive and energy inefficient farming system. Following the collapse of the Soviet Union, the former concessional trade relationships which benefited the North Korea were not available. The three flood and drought years between 1994 and 1996 only served to complete the collapse of the agriculture sector.<ref name="undp.org"/><ref>{{cite web |last1=Ireson |first1=Randall |title=Food Security in North Korea: Designing Realistic Possibilities |url=http://fsi-media.stanford.edu/evnts/4140/Ireson_FoodSecurity_2006.pdf |publisher=Asia-Pacific Research Center, Stanford University |access-date=June 15, 2007 |url-status=dead |archive-url=https://web.archive.org/web/20150904004856/http://fsi-media.stanford.edu/evnts/4140/Ireson_FoodSecurity_2006.pdf |archive-date=September 4, 2015 }}</ref><ref>{{cite web |title=CIA World Fact Book |date=November 24, 2021 |url=https://www.cia.gov/the-world-factbook/countries/korea-north/ |access-date=January 24, 2021 |archive-date=August 12, 2015 |archive-url=https://web.archive.org/web/20150812052526/https://www.cia.gov/library/publications/the-world-factbook/geos/kn.html |url-status=live }}</ref>
In 2004, more than half (57%) of the population did not have enough food to stay healthy. 37% of children had their growth stunted and {{frac|1|3}} of mothers severely lacked nutrition.<ref>{{cite web|last1=Central Bureau of Statistics |title=DPRK 2004 Nutrition Assessment Report of Survey Results |url=http://www.unicef.org/dprk/dprk_national_nutrition_assessment_2004_final_report_07_03_05.pdf |access-date=June 15, 2015 |url-status=live |archive-url=https://web.archive.org/web/20160304092506/http://www.unicef.org/dprk/dprk_national_nutrition_assessment_2004_final_report_07_03_05.pdf |archive-date=March 4, 2016 }}</ref>

In 2006, the World Food Program (WFP) and FAO estimated a requirement of 5.3 to 6.5 million tons of grain when domestic production fulfilled only 3.825 million tons.<ref>{{cite journal|journal=[[Human Rights Watch]] |title=A matter of survival: the North Korean government's control of food and the risk of hunger |year=2006 |volume=18 |issue=3 |url=http://reliefweb.int/report/democratic-peoples-republic-korea/matter-survival-north-korean-governments-control-food-and |url-status=live |access-date=December 14, 2013 |archive-url=https://web.archive.org/web/20131215011748/http://reliefweb.int/report/democratic-peoples-republic-korea/matter-survival-north-korean-governments-control-food-and |archive-date=December 15, 2013 }}</ref> The country also faces [[land degradation]] after forests stripped for agriculture resulted in soil erosion.<ref>{{cite web |title=CIA&nbsp;— The World Factbook |date=November 24, 2021 |url=https://www.cia.gov/the-world-factbook/countries/korea-north/ |publisher=Central Intelligence Agency |access-date=January 24, 2021 |archive-date=August 12, 2015 |archive-url=https://web.archive.org/web/20150812052526/https://www.cia.gov/library/publications/the-world-factbook/geos/kn.html |url-status=live }}</ref> In 2008, a decade after the worst years of the famine, total production was 3.34 million tons (grain equivalent) compared with a need of 5.98 million tons. Thirty seven percent of the population was deemed to be insecure in food access.<ref>{{cite web|title=FAO/WFP Crop and Food Security Assessment Mission to the Democratic People's Republic of Korea 8 December 2008 |url=http://www.fao.org/fileadmin/user_upload/emergencies/docs/FAO-WFP_Crop_and_Food_Supply_Assessment_Mission_Report.pdf |website=fao.org |access-date=January 15, 2009 |url-status=live |archive-url=https://web.archive.org/web/20150904004856/http://www.fao.org/fileadmin/user_upload/emergencies/docs/FAO-WFP_Crop_and_Food_Supply_Assessment_Mission_Report.pdf |archive-date=September 4, 2015 }}</ref> Weather continued to pose challenges every year, but overall food production grew gradually, and by 2013, production had increased to the highest level since the crisis, to 5.03 million tons cereal equivalent, against a minimum requirement of 5.37 MMT.<ref>{{cite web|title=FAO/WFP Crop and Food Security Assessment Mission to the Democratic People's Republic of Korea, 28 November 2013 |url=http://www.fao.org/docrep/019/aq118e/aq118e.pdf |website=fao.org |access-date=January 15, 2015 |url-status=live |archive-url=https://web.archive.org/web/20150306030926/http://www.fao.org/docrep/019/aq118e/aq118e.pdf |archive-date=March 6, 2015 }}</ref>

In 2014, North Korea had an exceptionally good harvest, 5.08 million tonnes of cereal equivalent, almost sufficient to feed the entire population.<ref name="aljazeera-20140327">{{cite news|url=http://www.aljazeera.com/indepth/opinion/2014/03/n-korea-myth-starvation-2014319124439924471.html |title=N Korea and the myth of starvation |author=Andrei Lankov |publisher=Al Jazeera |date=March 27, 2014 |access-date=November 8, 2014 |url-status=live |archive-url=https://web.archive.org/web/20141121211528/http://www.aljazeera.com/indepth/opinion/2014/03/n-korea-myth-starvation-2014319124439924471.html |archive-date=November 21, 2014 }}</ref> While food production had recovered significantly since the hardest years of 1996 and 1997, the recovery was fragile, subject to adverse weather and year to year economic shortages. Distribution was uneven, with the Public Distribution System being largely ineffective. North Korea now has in most years lower malnutrition levels than in some richer Asian countries.<ref name=ap-20190322>{{cite news |url=https://apnews.com/fe394eef5f7848f5be284d21a4b7624a |title=North Korea, seeking food aid, links sanctions to shortages |last=Talmadge |first=Eric |publisher=Associated Press |date=March 22, 2019 |access-date=April 2, 2019 |archive-date=May 8, 2019 |archive-url=https://web.archive.org/web/20190508232655/https://apnews.com/fe394eef5f7848f5be284d21a4b7624a |url-status=live }}</ref> However, in 2019 North Korea had the worst harvest in over a decade, which the United Nations described as a "hunger crisis".<ref>{{Cite web|date=May 3, 2019|title=North Korean families facing deep 'hunger crisis' after worst harvest in 10 years, UN food assessment shows|url=https://news.un.org/en/story/2019/05/1037831|access-date=October 20, 2021|website=UN News|language=en|archive-date=October 20, 2021|archive-url=https://web.archive.org/web/20211020073325/https://news.un.org/en/story/2019/05/1037831|url-status=live}}</ref>