Can Surging Grain Prices Spark Unrest in N.Korea?

18 03 2008
The Hyundai Economic Research Institute, via Chosun Ilbo, reported that

surging international grain prices may worsen North Korea’s food shortage and lead to other serious problems in the country. In a report released on Sunday, the Hyundai Economic Research Institute said, “Soaring international grain prices will further worsen North Korea’s food shortage and encourage more North Koreans to flee the country. This will very likely lay a big stumbling block to North Korea’s opening and create instability for Northeast Asia as well.”
If it is protracted, the upward rise of grain prices caused by short supply will have serious effects on global food security. This, in turn, may cause wide-spread starvation, produce more refugees, and cause regional armed clashes, the research institute said.
In order to attain food security, the research institute urged the South Korean government to enhance its food self-sufficiency and lay a stable foundation for food supply by strengthening cooperation with neighboring countries in cultivating food crops on undeveloped land. The institute also called on the government to seek strategic cooperation with North Korea in the agricultural sector.

This report does not seem to be exactly right.

1) North Korean agricultural sector is NOT linked to international grain markets;
2) Humanitarian aid from overseas does NOT necessarily need to be given in the form of top-quality grain;
3) North Korea is NOT going to “open up” even if the grain prices are low or humanitarian assistance is bountiful.

On the contrary, the soaring grain prices may help North Korean become a net exporter of grain, raising the badly needed foreign exchange. If needed, a single directive from Pyongyang can make the whole country switch from rice and




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