to exploit the metals and minerals, as well as foreign equipment and spare parts.) Add that to chronic electricity shortages, and economic prospects get even worse; the lack of electrical power is the largest bottleneck to any industrial development of North Korea. I have visited provincial factories far from the capital where workers slept in the factory at night so they could wait for sudden electrical bursts. When the power came back and the lights went on, the workers jumped to their feet to operate the machines for a couple of hours until the next blackout. They’d sometimes go without electricity for the remainder of the day.
Historically, North Korea had difficulties propping up its industrial economy without sufficient electricity, but the situation was always better before the cold war ended. Thanks to flooding, hydro-power generation dramatically dropped until the mid-1990s. In addition, the coal supply declined and wasn’t enough to feed thermal power plants, because of the end of Soviet subsidies and because many coal mines were flooded in the 1990s.
In the late 1980s, North Korea generated its peak electricity output, estimated at 30 terrawatt-hours. (1 terrawatt-hour is 1 billion kilowatt-hours, the equivalent of the amount of energy that is produced by a 1 million megawatt generator over a period of 1 hour.)
Surprisingly, the World Resources Institute estimated in 2010 that North Korea’s electricity consumption per capita was 600 to 800 kilowatt-hours per year, compared to 402 in India and merely 74 in Myanmar. The estimates seemed impressive, but flawed. They may be based on nominal electricity generation and distribution capacities, versus a much lower actual electricity production and distribution. About two thirds of the power came from dams built mostly under Japanese rule, and the remainder from coal plants—two sources that add up to a decent output, but not enough for the entire country.
In the 1990s, the total power production dropped below 20 terrawatt-hours, according to most estimates. ABB, a firm I represented that worked on power technologies, suggested that the loss of power during transformation and distribution amounted to up to 25 percent. We recommended that the Ministry of Energy Production and Coal Industry allocate more resources for fixing up the country’s electrical infrastructure. The approach would have been far more cost-effective than adding new power stations, and total savings would have corresponded to a substantial double-digit percentage.
Logistics (or the lack of it) has as much to do with North Korea’s food shortages as it does with power shortages. North Korea is home to hundreds of thousands of what were once pristine agricultural machines and trucks. This was because mechanization of agriculture as well as modern transportation (in addition to electrification) was one of Kim Il Sung’s most important goals for the socialist country. After the 1990s, they fell into disrepair. Many are still out of order, and the country can’t get enough spare parts or fuel. A team of foreign experts from the Swiss Development and Cooperation Agency and NGOs estimated that up to 20 percent of the annual harvest rots in the fields and never reaches consumers in the cities. That made the food shortages of the 1990s even worse.
Throughout the 2000s, the state-led business sector has been trying to repair and set up new power stations. The situation today has improved over that of a decade ago, when I arrived in North Korea. Several power stations are being built along the Huichon River, and after 11 years of construction, the largest one, with a power capacity of 300,000 kilowatts, was completed in 2012. Pyongyang is the main beneficiary, and it will suffer from fewer blackouts as a result. The dams will help protect cultivated land and residential areas along the river that have been regularly flooded in the past, helping bring about devastating food shortages. But the total power output remains substantially below the record output at the end of the 1980s, and it’s not clear when or if the nation will return to those days.
North Korea’s ailments partially grow out of its “military first” policy, which gobbles up funds that could go to infrastructure and education and instead puts them in the hands of the nation’s military. The U.S. government put forward figures, possibly exaggerated, suggesting that North Korea is the world’s most militarized country: about a million people, or 20 percent of men aged seventeen to fifty-four, serve in the regular armed forces. That number doesn’t include the substantial reserve force of seven to eight million soldiers out of a total population of twenty-four million. The number pretty much includes every person in their twenties and thirties, who are ready to fight at a moment’s notice.
In addition to being a strong deterrent for potential aggressors, a nuclear arsenal is relatively cost-effective compared to legions of obsolete weaponry and a massive defense force, a senior party official explained to me.
WILL NORTH KOREA STRIKE GOLD?
For all the errors and mismanagement, there’s reason to be hopeful for the future. The North Koreans are very pragmatic people, coming from a long tradition of industrialism in its economic alliance with the Soviet Union. During the cold war, the DPRK even boasted a higher percentage of industrial workers than its former socialist ally, which is an important measure of “socialist progress.” That factor, combined with the population’s 99 percent literacy rate, can bring about a swift reconstruction of industry once economic reforms are carried out.
All over the countryside I saw that people were in some ways not living agrarian lives. Their skills were clear, for example, when they would weld with pinpoint precision, something only well-trained and experienced craftsmen do. More extraordinary was their ability to weld in the dark, despite not having undergone professional training. Factories were better organized and cleaner than those I’ve seen in other socialist countries in the past, such as those in Czechoslovakia and Hungary.
I was also impressed by the electrical and mechanical engineers who explained to me how they built a hydropower station, which included turbines and generators. The construction was based on one dam in a simple 1970s Russian leaflet with a few photos, but without detailed drawings and technical specifications. A team of ABB experts whom I led on a delegation were amazed at the ingenuity and called the station an engineering masterpiece.
The good work ethic comes from the party’s sophisticated governance system, which uses awards and high-level visits. One system, called the Ch’ŏngsan-ri management method, started in the 1960s. It was first introduced in the Chongsanri agricultural cooperation in 1960 before it was applied as an agricultural management system for collectivized farms. Essentially, the system was designed to give workers ideological and spiritual rather than material incentives. It urged officials to emulate Kim Il Sung by doing field inspections during which they addressed farmers’ grievances and listened to their ideas.
For factories, the Taean work system was introduced and aimed at streamlining bureaucratic management. This system was first introduced in 1961 at the Taean Electric Machinery Plant, which put a party committee at the head of an enterprise. The members were to debate and decide collectively the directions and methods to be applied in the company. As in the case of Chongsanri, the party committee had not only a supervisory role but also an inspirational one to permanently motivate workers to achieve production goals. Observers in the West may see an approach like this as paternalistic and backwards, but stripping it of all moral judgments, it gave North Koreans reason to work hard when times were difficult.
These socialist management systems were, with the exception of those of Mao’s China, the most radical ones. Even Stalin’s Soviet Union gave material benefits to high-performing workers. In addition to these methods, mass production campaigns like the Chollima movement that started in 1958 were introduced, which exhorted the workers to achieve production targets. To this effect it included “socialist competition” among industries, companies, farms, and work units, where the winners earned praise for their outstanding socialist and patriotic deeds.
The Korean Workers’ Party also has mass campaigns extolling workers to labor and to meet the planned targets. And last but not least, the top leaders regularly inspect factories, farms, shops, and military units, where they offer guidance and mix with exemplary workers, farmers, and soldiers.
