[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.]
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.
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. Read the rest of this entry »