North Korea spends money it needs for food on missiles

North Korea could have covered its food shortages if it had used money spent on missile launches on foodstuffs and fertilizer, but foreign aid enabled it to avoid having to forgo weapons development, according to a Seoul-based think tank.

The total cost of the 63 ballistic missiles launched by the North so far this year — 46 of which were fired after South Korean President Yoon Suk-yeol took office in early May — is likely to have exceeded $560 million, according to the Korean Institute for Defense Analyses (KIDA).

The think tank estimates that the money poured into missile launches this past year would have been more than enough to cover the estimated $417 million needed to feed North Korea's population annually.

The North launched approximately 50 short-range ballistic missiles (SRBM) this year and eight suspected intercontinental ballistic missiles (ICBM), in addition to five intermediate-range missiles (IRBM), according to data compiled by South Korea’s Joint Chiefs of Staff and Foreign Ministry.

SRBMs are the cheapest, with the price for components per missile estimated by KIDA to cost between $3 million and $5 million, while IRBMs are estimated to be two to three times more expensive. ICBMs are the most expensive, with each ICBM test estimated by KIDA to have cost Pyongyang between $20 million and $30 million.

If the JCS identification of North Korean missiles and the KIDA estimates of their respective costs are correct, the eight ICBM launches by Pyongyang add up to $240 million — only $10 million less than the cost of 50 SRBM launches.

According to the same data, the five intermediate-range ballistic missiles (IRBM) launched by Pyongyang cost the regime an additional $75 million.

While the true cost of North Korea’s missile launches is not known with certainty, international prices for rice and corn — the country’s main staples — suggest the country’s food shortfall could be solved without external aid if the money for weapons development went to buying grain or fertilizer.

In its September 2022 International Food Security Assessment, the United States Department of Agriculture (USDA) estimated that 68.6 percent of North Koreans, or 17.8 million people, were food insecure, and that the country faced a total food shortfall of 1.21 million metric tons of staple grains.

If the North were to purchase that amount of rice and corn at a 50:50 ratio, according to crop futures prices at the Chicago Board of Trade on Dec. 2, the regime would have spent $417 million — more than $100 million less than it spent on missiles this year.

In previous years, the North did not face a choice between its weapons and food, mostly because neighboring China lent a vital lifeline to the impoverished regime.

In 2020, Beijing delivered 600,000 tons of rice and 200,000 tons of corn in food aid to Pyongyang, followed by 500,000 tons of rice and 550,000 tons of fertilizer last year.

Fertilizer aid is even more crucial to keeping the North’s population fed than direct food relief, according to a report by Kwon Tae-jin, director of the Research Institute for North Korea and Northeast Asia at the GS & J Institute, a South Korean agricultural research organization.

“Each additional ton of fertilizer has the effect of increasing rice output by two to three tons,” Kwon wrote.

China sent only 100,000 tons of rice in food aid to the North over the past year, and conditions for food production in the North were worse this year due to adverse weather conditions.

“Grain production decreased due to a lower number of sunny days this year,” said Park Kwang-ho, a professor at the Korea National College of Agriculture and Fisheries.

“Grains that are usually rich in carbohydrates through photosynthesis during the harvest season, but the lower amount of sunlight across the Korean Peninsula has affected this process,” he explained, adding reductions in agricultural production will be greater in North Korea than in the South “because the North cannot systematically manage the damage caused by pests, in addition to lacking fertilizer.”

North Korean defectors in the South who send remittances to families and relatives left behind in the North have told the JoongAng Ilbo that they heard economic conditions have deteriorated.

“I used to send only about 200,000 won ($153) to my parents to cover their monthly living expenses, but this past month I had to send 2 million won,” said one defector from North Hamgyong Province.

This anecdotal evidence corresponds to a report issued by the Bank of Korea in July, which said the North’s GDP fell by 0.1 percent from 31.43 trillion won in 2020 to 31.41 trillion won last year.

Compounding the economic difficulties of the regime is its continuing blockade on its once-active border trade with China, previously conducted by both smugglers and regime-sanctioned traders.

“State-approved markets in cities adjacent to the North Korea-China border have not yet been allowed to re-open since the North Korean authorities disclosed the Covid-19 outbreak in May,” said Cha Moon-seok, a researcher at the Seoul-based Korea Institute for National Unification.

“With the markets closed due to Covid-19 controls, the North Korean middle class appears not to be able to enjoy the standard of living it had before the pandemic,” said Kim Youngsoo, a political science professor at Sogang University.

Recognizing the food challenges faced by the North and the threat of its advancing nuclear weapons and missile program, South Korean President Yoon Suk-yeol in August laid out what he called “an audacious initiative” offering Pyongyang a large-scale food program that included assistance in increasing its agricultural productivity, as well as wide-ranging development aid.

Kim Yo-jong, the sister of regime leader Kim Jong-un, wasted little time heaping scorn on Seoul’s offer, making clear Pyongyang’s preference to keep its weapons instead of accepting economic help.

“No-one barters their destiny for corn cake,” Kim said in a statement in which she also called the South Korean plan the “height of absurdity.”

BY MICHAEL LEE, JEONG JIN-WOO, CHUNG YEONG-GYO [lee.junhyuk@joongang.co.kr]