B. Objectives
" To follow-up on existing projects
" To start detailed preparations for interventions listed in the SOA15/02
" To explore the situation in North Hamgyong and Ryanggang provinces
" To join the FALU team for monitoring activities
" To better understand the recently announced reforms

C. Summary
The difference between Pyongyang and the rest of the country is stark. The reform measures taken in July are mainly an increase in wages to boost production, price adjustments and the abolishment of the food rationing coupon system. This is a drastic change of lifestyles affecting the whole population, but it is too early to analyze the potential implications of the changes. What remains very clear, however, is the fact that the need for humanitarian assistance has NOT changed and will be particularly crucial if the country is going through a transition.

D. Introduction
During the four weeks spent in the DPRK, I had the opportunity to travel over 4,600 kilometers by jeep -- mostly on dirt roads with potholes -- and to visit, in addition to Pyongyang, the provinces of S. Pyongan, Kangwon, S.Hamgyong, N. Hamgyong and Ryanggang. Time was spent for assessments and monitoring in 17 of the 163 counties accessible to the international community.
The delegation was rewarded for the rather tiresome trip with two short excursions to Mt. Chilbo and Mt. Peaktu. Truly a stunning mountain scenery!

E. Reforms
On 1 July 2002, the DPRK government started a reform process with two key structural changes to the economy: a) changes in the pricing system caused by the removal of state subsidies and b) the increase of living allowances to provide both an incentive to expand production and to assist people to cope with increased prices for goods and services. Schooling, medical care, and child care will remain free and food rations to families without wage earners will also continue.
The biggest impact so far seems to be that individuals in the whole country are, for the first time, given more responsibility and thus feel more in charge of their own destiny. The cradle-to-grave security has disappeared. Families have to prepare household budgets, pay rent for the apartments, settle gas, water and electricity bills, and buy food and clothing.
The people met during my visit were generally very enthusiastic about the new developments. Shops in cities and towns had been stocked up and were attracting customers, who seemed to be comparing prices but somewhat hesitant to spend money. Words like profits, cost-effectiveness, management have entered the vocabulary of ordinary citizens. Will the market experience growth because individuals now are able to experience consumer choice? Without state assistance, what will happen to workers of obsolete factories or flooded mines? Raising prices and wages could stimulate inflation and bring social instability.
Despite many question marks, the steps taken are bold, courageous and in the right direction and hopefully followed by reforms in the financial sector, taxation system, and labor market. The need is for basic, systemic change and not a fast introduction of a market economy -- otherwise the pain for some segments of the society will be extreme. The support to the weak and vulnerable will have to continue; in fact needs are very likely to grow with more people having coping difficulties due to the changes.

F. Observations

Food
Although the overall food availability situation has stabilized and coping mechanisms have increased, a food deficit will continue to affect mainly people in the mountainous areas and in industrial towns and cities. With WFP receiving fewer contributions, beneficiary numbers are being reduced, i.e. for the elderly and/or school children.
Provincial- and county-level officials expressed hope to receive again, not only food for pregnant and nursing women, but also for children. Government figures indicate that 40% of children under 5 are malnourished. It is estimated that there are around 400,000 pregnant and nursing women in the DPRK. A good start in life is related to a healthy mother giving birth to a healthy baby. Birth weights reported during the trip have increased and are above the 2.5 kg-level, but mothers tend to have their first child rather late -- an issue, like the many stunted children, related to chronic food shortages.

Local Food Production Units
WFP, together with UNICEF and the DPRK authorities are now producing blended food such as Corn Soya Blend, Cereal Milk Blend, biscuits for school children and noodles locally in different factories (17) in Pyongyang, Wonsan, Humhung, Chongjin and Hyesan. Although input and capacity problems exist, local production is not only cheaper, it also contributes towards revitalizing the decayed industrial sector.
The biscuit factory visited seemed generally well managed and commodities (sugar and wheat flour) provided by CFGB and Caritas appreciated.

Agriculture
Traveling along the east coast, observing fields, visiting several cooperative farms and speaking to officials and farmers, the prognosis for this year's harvest are better than in 2001 due to more favorable weather conditions and timely and increased availability of fertilizers. A food deficit will, however, still remain.
The winter/spring crops had performed well and during the time of the visit, people were consuming mostly potatoes. Maize was about to be harvested, but in a number of locations the maize fields appeared very stunted and yellowish. Farmers complained about drought conditions in May and June. Replanting activities had not produced the expected results.
Around the rice fields beans had been planted, providing proteins. Fresh fruits from orchards are creating cash income for cooperative farms. Composting work was ongoing on all farms. The increase of livestock (goats, sheep, pigs, cows, oxen, geese, ducks, chickens, rabbits) at cooperative farms and individual households is a positive sign of improvements. Tractors and trucks are still very few and these are often old and almost beyond repair.
With a few exceptions all farming families cultivate kitchen gardens or small plots on hillsides. Although the official size of kitchen gardens is 30 pyong (1 pyong is 3.48 sqm), these plots tend to be bigger, are well taken care of and generally flourishing. Farm managers acknowledged the fact that the rural population is better off than the urban people, having more food available and also a more varied diet.
Caritas support to cooperative farms is highly appreciated. It provides farmers with sufficient food for their own consumption and at the same time, more food can be sold to the government, thus increasing food availability for those in urban areas and/or those with no access to land.
The possibility of assisting cooperative farms as well as individual (poor) households on farms -- thus working on two levels within one farm -- was discussed and a pilot project on one or two farms is under consideration.

Health
Inadequate health services, poor living conditions, water and sanitation problems and the ongoing food shortages continue to affect the overall well-being of the people.
Health activities are not sufficiently supported. North Korea has a health system with hospitals and doctors, but little in terms of inputs, access to up-to-date knowledge and training. In most rural hospitals and clinics visited, no equipment had been received from the government for the past 12 years and only very limited supply in terms of supplies and drugs. The lack of regular markets or shops that sell medicine adds to the difficulties of the sick.
Hospitals reported more realistic figures in terms of in-patients; outpatient numbers are high due to the fact that drugs are only provided for up to two days. Thus patients, or their family members, have to return to the clinic every other day.
According to government reports life expectancy has fallen from 66.8 years in 1993 to 60.4 years in 2001.

Nutritional Survey
Chronic malnutrition is high. The misery and poverty seemed in the mid-1990s more equally shared across the whole country. Disparities in income and standards of living are starting to grow mainly due to the breakdown of the public distribution system with food surplus provinces no longer delivering cereals to food deficit areas. This situation is likely to develop further with the introduction of new price and wage structures.
The forthcoming second nutritional survey, to be conducted by UNICEF, WFP and the local authorities in October 2002, will be very useful and assist the donor community in terms of future planning.

Children
Schools and kindergartens were still on summer holidays, but children observed in nurseries appeared all right, at least in terms of getting enough food, but showed that there is a lack of stimulation. In some cases clothing seemed to be a problem for parents to provide. The numbers of children given by officials in terms of attendance and headcounts made did not always tally.
Observing rather high numbers of severely malnourished and sick children in baby homes was shocking. It seems to be no longer a question of food availability, but more an issue of good management and care practices.
Children in orphanages and boarding schools are all extremely stunted, but seemed otherwise lively and healthy. School material is scarce. Educational toys and some sports equipment would help the children to pass time in a more constructive way.
Food, clothing, socks and shoes etc. provided by Caritas were appreciated and needed; requests for winter underwear were made in different places.
Almost all 37 accessible residential childcare institutions have vegetable plots and the proposal by Caritas to support these gardens with input packages for the 2003 agricultural season was well received.

Monitoring
It takes three days to travel from Pyongyang to Chongjin and one more day for Ryanggang. The contrast between locations receiving regular UN or NGO visits and those places where only few monitoring visits take place is noticeable. Officials show distrust, tend to be less flexible and less willing to dialogue. Goods tend to arrive at county level, but county or provincial officials, being far away from Pyongyang, appeared at times to decide according to their own priorities in terms of allocating donations. Regarding health inputs in Ryanggang, distribution plans were not followed properly and items were distributed to more units than listed. This is, on one hand, understandable because officials prefer to give everybody a little in order not to create tensions. But it makes monitoring and planning extremely difficult.
Mistakes in terms of allocating inputs for residential childcare institutions were also discovered and discussed. Shoes had not been distributed correctly and the staff at a boarding school was asked to make a swap with the orphanage that seemed to have received the bigger sizes. Soap, a very scare commodity in the DPRK, was treated like a precious gift and in one place the baby home and the boarding school had received soap, although only baby homes were listed on the distribution plan. Hoarding (for example winter clothing or food items) is another problem at the residential child care institutions, due to the staff's fear that supplies might dry up.
With an increase in market activities, it is very likely that monitoring will become even more difficult.

Targeting
With the recent first steps of an economic reform made, it will take time until the whole country will be impacted. The likelihood that more people will fall out of the already weak social safety net is high. It will, therefore, remain important for Caritas to protect the most vulnerable, provide humanitarian assistance (including food aid), support farming in food insecure counties and assist in the health sector at grassroots level. The population on the east coast, a highly industrialized area with limited agricultural land, remains particularly vulnerable.

Natural disasters
Every year the DPRK is affected by natural disaster and this year is no exception. At the end of August/early September, parts of Kangwon province were hit by a typhoon. Although the storm was not considered major, such disasters still bring suffering to an already fragile community.

Relationship with government
The trip was well-planned, but in the more remote and distant provinces and counties there is a clear need for more regular monitoring visits to beneficiaries and in-depth discussions with provincial and county officials. The meaning of working in partnership, of transparency and accountability needs to be better understood. Talks with partners were frank and at times tense and complex.
It also remains important to report findings to the Pyongyang (national) level. Officials of the different ministries tend to have few opportunities to travel beyond provincial capitals and are thus not aware of the actual situation at county or village level.

Relationship with beneficiaries
The dialogue is gradually becoming easier and people are more open to express their views and needs. Requests tend to be reasonable. Introducing the work of relief, development and social services provided by non-governmental organizations, the contributions by civil society, and the involvement of volunteers, is crucial for a better understanding.

G. General observations:
" Selling and bartering nowadays go on openly and during certain days people were observed walking to visit the farmers markets.
" The South Korean fertilizer donation has made a big difference to the agricultural sector and hopefully this support will continue in the years to come.
" The fertilizer bags, marked in English and Korean and stating the content and the country of origin (Republic of Korea) are reused and can be seen all over the DPRK.
" Shops in small towns on the east coast have been stocked up and potential customers were seen checking out items, comparing prices and considering purchasing.
" People are dressed more colorfully and no longer just in plain colors. Proper shoes are for many still a big problem.
" Everything is reused; i.e. food tins are made into lamps and lanterns, drink cans into lighters.
" Children have very few toys, but in a few places boys and girls were excitedly playing with 'game boys', probably produced at a local factory for export.
" Secondary school students are now also learning English and at times even had the courage to approach foreigners and asked them where they came from.
" Cars, especially right-hand drive models, have increased and observing a young Korean lady driving a car, amazed our local male traveling companions. Bicycles are also becoming common.
" The infrastructure and energy problems are beyond what aid agencies can address, but are key for the future development of the DPRK.
" The overall situation seemed quite relaxed with very little rhetoric being used.

H. Recommendations
" In order to avoid growing inequalities in the society, better aid targeting and planning in collaboration with the UN agencies, the FDRC, the relevant line ministries and the local people/beneficiaries will become even more essential.
" Increased monitoring visits to the more remote areas/counties are required if support is to benefit the people in these areas.
" With the cradle-to-grave security fading and cost factors a concern to everybody, the provision of management training on project sites, on farms, in children's institutions, hospitals, schools etc. should be given consideration.
" The first steps of the reform process have already made an impact on the DPRK society. Equality in society will help to maintain stability. It will be crucial for the authorities to manage change cautiously and wisely, and to receive advice and support from the international community.

" The need to continue humanitarian aid combined with development interventions remains and further support for the Caritas appeal SOA15/2002 (so far only 43% of the target has been reached) is requested.

Hong Kong, 30 September 2002

Kathi Zellweger
Director International Cooperation
Caritas-Hong Kong
2, Caine Road
Hong Kong
Tel. (852) 2522 9211
Fax (852) 2523 0438
Email zellweger@caritas.org.hk