Food aid diversion: Why it does NOT matter by Rüdiger Frank

[Dr. Rüdiger Frank is Professor and Chair of East Asian Economy and Society, as well as Deputy Head of the Department of East Asian Studies at the University of Vienna, Austria. – CanKor.]

Donated food in a Chonnae nursery (photo by Erich Weingartner)

One of the things I have, for years, been having difficulties to understand is the discussion of (staple) food diversion. It is of course an important political issue if we consider that donors like to give their resources for a specified purpose and discontinue donating if it cannot be proven that everything went as promised. Fair enough.

But from an economic perspective of feeding North Koreans, food diversion does not matter much.

Let me explain.

1. Most importantly, food aid is not the only source of food in North Korea. It is only supposed to cover a gap between demand and supply. If “non-deserving groups” get no food aid, they will take their share from the other sources such as domestic production or regular imports, thus reducing the food amount available for deserving groups. In the end, it is a zero sum game. What matters is the total amount of food available in North Korea. If it is high enough, the poor will eat. If it is not, they will be the first to suffer. It’s as simple as that.

2. The military: why do we seem to agree that the military must be treated as a non-deserving group? A young man is “deserving” as a baby, a toddler, a schoolboy etc. until the age of 17 or so; then he is forced by the state to wear a uniform and to guard hill No. 316 for a decade, while others of his age who were lucky enough to be born elsewhere enjoy the best time of their lives. I have strong doubts that the young man in question does this voluntarily. After he takes off the uniform, magically he becomes “deserving” again. Strange, isn’t it.

3. Finally, some more economics. We know that the PDS is malfunctioning, i.e. people have to buy at least part of their survival ration on the markets – at market prices. The poor and vulnerable are what they are because they have little money, so they suffer the most from high food prices. As the markets are markets, prices there depend on supply and demand. The best way to help the poor is thus to lower the market prices by increasing the amount of available food in North Korea. Food aid is one way of doing so, although it is of course not a sustainable solution. I’d rather go for trade. Anyhow, even if food aid is diverted, it will eventually show up on the markets and drive prices down, or it will appear in the pockets of an official who will now not have to drive prices up by purchasing food on the markets. Either way, the market prices decrease and the poor benefit.

Well, all this of course only applies if the goal is to help the poorest among the North Korean people. Yet this, I am afraid, would be a quite naive assumption.

Related articles:

• Food Aid Debate – Introduction
• The North Korea Food Aid Dilemma by Chris Nelson
• + Reaction to the NK food crisis by Mitchell Reiss
• South Korea’s Humanitarian Dilemma by Victor Hsu
• + Commentary on Hsu article by David Straub
• Chairman Kerry Urges Resumption Of Carefully Monitored Food Aid For North Korea
• The WFP’s Findings Parsed, by Marcus Noland
• South Korean Churches under fire for sending aid to North
• CHOSUN ILBO on NK food aid
• + Comment on Chosun Ilbo by Marcus Noland
• ++ COMMENT ON HAGGARD/NOLAND by anonymous USG source
• + Comment on Chosun Ilbo article by Karin Lee
• Trapped in a Devil’s Bargain
• Feed vulnerable North Koreans say Brookings’ Cohen and Abramowitz
• South Korea’s Internal Division over Humanitarian Aid to North Korea and North Korean Human Rights, by Jhe Seong-ho
• The Logic and Illogic of Food Aid by Stephan Haggard and Marcus Noland
• Alliance Politics: Legislating Hunger by Morton Abramowitz
• Should we feed North Korea? The case AGAINST by Bruce Klinger
• Should we feed North Korea? The case FOR by Dorothy Stuehmke
• Meeting refugees from North Korea by Mary Robinson
• The North Korea Food Aid Dilemma by Toni Johnson
• Food aid discussion less informed than necessary by Victor Hsu