THEMATIC ROUND TABLE MEETING ON AGRICULTURAL RECOVERY & ENVIRONMENTAL PROTECTION (AREP) FOR THE DEMOCRATIC PEOPLE'S REPUBLIC OF KOREA (DPRK)

Geneva, 28-29 May 1998

Statement by H.E. Choi Su Hon, Vice Minister of Foreign Affairs

Mr. Chairman,
Distinguished Delegates,
Excellencies,

Ladies and Gentlemen:

I want to begin by extending, on my behalf and on behalf of the Government of the Democratic People's Republic of Korea, our warmest welcome to this Roundtable Meeting on Agricultural Recovery and Environmental Protection in DPR Korea - AREP for short. Thank you for this demonstration of your interest in assisting my country at a difficult moment in its history.

Before discussing the AREP Action Plan, I would like to express our particular appreciation to Mr. James Speth, the Administrator of the UNDP; to Mr. Nay Htul, the Assistant Administrator, who is with us today; to Mr. Christian Lemaire; the UN Resident Coordinator in DPR Korea; and to the U.N. staff members and consultants who assisted us in preparing for this Meeting. I would like also to thank the United Nations in Geneva for making arrangements for this meeting

This Round Table Meeting was organized by the UNDP at our request. DPR Korea Government officers from all concerned agencies oversaw and participated directly in preparations for the Meeting, including the collection and analysis of the statistical information used in the AREP Action Plan that is now being submitted for your consideration. Much of the information in the Action Plan document - with which the Government concurs - is being presented for the first time, and I commend it to your attention.

Over the next two days, we will concentrate our attention and discussions on the topic of Agricultural Recovery and Environmental Protection in our country.

Agriculture is important in DPR Korea. In 1993, our Government, under the guidance of the late Great Leader, President Kim Il Sung, had set out the framework for a new economic strategy which gave a new emphasis and precedence to agricultural development - along with the promotion of light industry and foreign trade. These priorities reflected our recognition of the need to adjust to changing international economic relations - including the need to earn more foreign exchange and promote investment in our country.

The repeated natural calamities of recent years - with their historically unprecedented floods and droughts - prevented the timely initiation of the plans and created the temporary production shortfalls and food shortages which we are currently facing.

The entire people have risen up and joined in the struggle to rehabilitate flood and drought damage, but we estimate that it will take at least three years to restore normal production levels and realize self-sufficiency in food grains - a time frame that is reflected in the AREP Action Plan.

Within this context, the Government has set a goal of producing about six million tons of grain by end of the year 2000. The achievement of this target will require, among other measures, major soil removal efforts and other work required for the full rehabilitation of flood - damaged farmland, the reconstruction of irrigation and drainage facilities, and the execution of major programs to repair other environmental damage, including erosion in hilly areas.

We hope that the international community will offer material and financial assistance to support us in this undertaking, to improve the effectiveness of already ongoing humanitarian assistance efforts, and to accelerate the introduction of sustainable agricultural development programs. We are fully aware of the significance or importance of the United Nation's approach to sustainable development and will cooperate fully in promoting its goals.

I would like now to review briefly the reasons for reduced food production on our country and offer a short explanation of how our efforts to address these problems will be supported by the AREP Action Plan.

The most immediate cause of current food shortages is the unprecedented series of natural disasters which have affected our country. It is important that people understand that these disasters were of such a magnitude that these shortages would have occurred even if other economic problems were not present.

The natural calamities of which the world community is well aware have included hailstorms in 1994, totally unprecedented and unpredictable floods in 1995 and 1996, and a drought in 1997. In addition to destroying standing crops, farmland, irrigation systems, and roads and railways in rural areas, the floods - in particular -wreaked havoc on the industrial and transport infrastructure that supports agricultural production. Fertilizer production as well as the generation of power needed for irrigation was impacted severely because of the flooding and effective destruction of coal mines and major damage to generation and transmission networks.

Taken together - and without repeating in detail a history that already is well-known - these misfortunes saw a reduction in grain production of as much as 75% compared to earlier years.

Agriculture also has been affected by recent changes in our international economic relations as well as by the continuation of economic sanctions, including an embargo. In particular, the recent and very rapid changes in the terms of our trade relations with East European and other trading partners have reduced both imports and exports. These changes have had a particularly negative effect on our ability to secure fuel for tractors and machinery, feedstock for fertilizer production, and other important agricultural inputs. Had these changes not occurred, we almost certainly would not need the amount of international assistance that we are requesting in the AREP Action Plan context.

We need to rebuild international trading relationships. I want to emphasize today that the principles of self-reliance which underlie DPR Korea's economy and society do not at all inhibit the development of mutually-beneficial trading ties or the promotion of joint ventures or other forms of foreign investment. In fact we want to establish cooperation and trade relations with new partners.

DPR Korea also is committed to expanding its relationships with international institutions, including the Asian Development Bank as well as other multilateral financial institutions. Our successful experience with International Fund for Agricultural Development lending has assisted us in developing policies to support expanded official international ties.

We have made - and will continue to make - efforts to develop economic and trade relations with countries across the world, even those hostile to us in the past, on the principle of respect for sovereignty, equality, and mutual benefit. In this context, regrettably, economic sanctions continue to function as one of the most important factors limiting our growth and preventing increased trade and other important forms of international involvement and cooperation.

We are striving now to create the conditions for increased trade and investment. A new policy and regulatory framework is in place to support joint ventures and protect the rights of foreign investors. In the context of this week's meetings, we would particularly welcome expressions of interest in increasing trade in agricultural products and promoting joint ventures and other forms of investment in the modernization of industries which support the farming sector. Obvious examples include fertilizer and other input production and the manufacture of tractors, pumps, and other farming equipment.

In the nearer term we have been forced to depend heavily on humanitarian support to assist in responding to the food shortages caused by natural calamities. I want to take this opportunity to express our profound thanks to the governments, international organizations, NGOs, and individuals who have provided us with food and other emergency aid.

However, we understand and the international community understands that emergency aid was never intended to provide a vehicle for restoring food production or achieving sustainable food security.

I want to turn now to a brief review of how we propose to achieve that goal. The plans that I will describe are incorporated in my Government's mid-term plans for the 1998-2000 period.

The restoration of agricultural production will depend primarily on the completion of already ongoing, domestically-financed rehabilitation efforts, the estimated costs of which are about US$ 1.7 billion, not including the value of voluntary labor by cooperative farmers and others. We are seeking additional international assistance - on the order of US$ 300 million - to complement these nationally-financed efforts, primarily to meet the foreign exchange requirements of rehabilitation.

We propose to focus AREP efforts on three broad sets of tasks - farmland recovery and rehabilitation, the restoration of irrigation capabilities, and emergency improvements to fertilizer production facilities. Agriculture Commission and other Roundtable speakers will provide more detail, but in broad-brush terms, our efforts will aim at:

Firstly - restoring to full production the farmland that was washed away, buried, or otherwise damaged by the floods. This work will require about US$ 140 million to restore production on 10,600 hectares of reclaimed tidal lands, US$ 31 million to repair 600 kilometers of river protection and training works, and US$ 23 million to restore 8,400 hectares of farmland where soil was either buried or washed away. The total cost of this work is about US$ 260 miilion of which $236 million will be financed with our own resources. The $24 million balance consists primarily of foreign exchange costs - particularly fuel and spare parts - for which we need to request AREP assistance.

Secondly - rehabilitating irrigation facilities damaged by the floods. The major task here is to complete the reconstruction of river embankments and sea breakers, including improving the safety of temporary work done immediately after the floods. This is a big job. Some 210 million cubic meters of soil still needs to be moved along with 21 million cubic meters of stone breakers and river embankments. Based on the cost of other flood rehabilitation work this will cost about US$ 1.15 billion. Further, many irrigation facilities in non-paddy areas also were damaged beyond repair and need to be replaced, at an approximate cost of US$ 644 million.

Thirdly - upgrading fertilizer production facilities. A recent UNIDO study confirmed our belief that we can reduce our fertilizer costs substantially and improve the reliability of supplies through relatively modest improvements to existing fertilizer plants. The cost of urgently needed improvements - almost all of which must be paid for with foreign exchange - comes to about US$ 43.0 million, which we propose to finance with AREP resources.

We will be able to finance most of these mid-term costs with domestic resources. International assistance is required to meet foreign exchange needs, particularly the purchase of fuel and lubricants for machinery, the replacement or repair of heavy equipment, and new power transmission and pumping equipment. Our inability to meet these foreign currency needs will create daunting bottlenecks to the timely completion of our work and the restoration of grain production.

As outlined in the AREP Action Plan, the assistance that we are requesting from the international community will do two things. Firstly, it will remove critical bottlenecks to the success of our own efforts to restore farmland and rural infrastructure. Secondly, it will provide transitional support for the costs of fertilizers and other inputs needed so that farmers can restore production of food that is now being imported at a higher cost through humanitarian assistance programs.

We are fully aware of the importance that the international community attaches to environmental issues and to broad participation in the management of development efforts. While my colleagues will be talking about the more technical dimensions of these matters, I want to address them briefly so that you will be assured that we share your impression of their importance.

It is easy to give lip service to the environment. We - instead - have incorporated environmental protection goals directly into AREP Action Plan activities. This is no easy task because farming in DPR Korea is necessarily land and input intensive. We have only 900 square meters of farmland per person, yet we attempt to meet all of our food grain needs. Farming is necessarily intensive and undeniably puts great strains on the environment.

At the end of the flood recovery period, DPR Korean farming practices will be more environmentally sustainable, river and tideland protection works will be safer, and new and more effective, watershed-based soil conservation and reforestation protection programs will be in place. Further, the rural population will have assisted in the planning and execution of this work, creating a sense of responsibility for sound resource management .

AREP-supported, environmentally centered investments will focus on practical goals of immediate utility to farmers and the rural community. Some illustrative examples that I would like to offer include:

Reducing the intensity of land use by phasing out maize farming in marginal hilly areas, establishing new pastures, and promoting grass fed as opposed to grain eating livestock production.

Improving soil fertility and reducing soil losses by introducing low-tillage farming practices and increasing the use of organic fertilizers.

Making better use of soils through the expansion of mixed and double cropping practices, and the increased production of highly nutritional vegetable and fruit crops.

Reestablishing forests, including mixed-use forests, as a part of flood rehabilitation work and through longer-term investment programs. This effort will require early AREP support to reestablish important nurseries destroyed in the floods.

And finally, making sure that our natural resources are preserved and protected for future generations, an effort that will include stronger protection for natural forests, better management of wildlife resources, and new measures - such as the demarcation of corridors - to promote and protect biodiversity.

A final topic that I want to emphasize is our commitment to effective implementation of the AREP Action Plan, and to the participation of farmers and other rural people in their planning and management. These are complex topics and my remarks will be brief. Other speakers will talk more about the need to strengthen rural institutions, including cooperative farms. And we will invite the direct participation of Roundtable participants in planning for the execution of AREP Action Plan-assisted programs.

DPR Korea has a solid human resource and institutional base on which we can build to restore and modernize agricultural production. The high level of education of our farmers is often unappreciated. Essentially all of the younger generation are the equivalent of high school graduates. Nearly half have undergone specialized technical training. Simple observation in the countryside will confirm that women are participating equally in education, with many now working in crucially important and difficult farm management and technical support and training positions.

Cooperative farm members and managers already have planned and executed many of the sorts of programs that would be supported through the AREP Action Plan. These include - in addition to straightforward flood rehabilitation work-introducing new cropping and husbandry practices; completing erosion control, pasture improvement, and forestation work; and modernizing farm-level water supply and sanitation facilities as well as clinics and schoolrooms.

On the last point I want to make sure that Roundtable participants understand the importance of tested, already functioning farmer cooperatives in the provision of sanitation, health, and education services. In particular, DPR Korean cooperatives already provide the effective "social safety net" that is often missing in other developing country settings.

Cooperative farms are supported through a network of County Cooperative Farm Management Committees with direct lines of communication to local government and to specialized departments of the Agriculture Commission, the Ministry of Forests, the Ministry of Land Use and Environmental Protection and other Government agencies.

AREP Action Plan programs will in general be executed through existing cooperative farm and local government networks, ensuring that they respond to practical needs and are executed with the full participation and collaboration of farmers and other rural beneficiaries.

I appreciate your attention during this somewhat long but still only introductory look at the issues we will be addressing over the course of the Round Table Meeting. Before closing, I want to reemphasize our confidence in our ability to make good use of international assistance, as well as our commitment to do so.

The basic pieces for success are in place:

Firstly, as a member of the international community we have decided to expand our role in international cooperation and exchanges.

Secondly - the concerned technical agencies including the Agriculture Commission, the Ministry of Forests, and the Ministry of Land Use and Environmental Protection understand and have committed themselves to the execution of these activities, including the pursuit of more appropriate land use through crop diversification.

Thirdly - the framework for a supporting industrial sector is in place, albeit in need of welcome foreign investment to help modernize fertilizer and farm equipment production facilities.

Fourthly - DPR Korea has a tested framework of cooperative farms and rural institutions, fully able to help plan, participate in, and assume responsibility for the sustainability of rehabilitation assistance and longer-term development work.

Fifthly - the DPRK Government has expressed its commitment to the goals of AREP Action Plan and to the provision of the budgetary and other resources needed for its success.

In three years we can repair the damage of recent years, reestablish the productive capacity of DPR Korean agriculture, and put our farmers back to work. In the context of shared respect for our sovereignty and national security, my Government is prepared to push ahead rapidly with this work and to ensure all possible cooperation with international participants in this process.

I look forward to your guidance as to how we can further strengthen our AREP Action Plan and as to how we can best make use of the resources that you can share with us.

Thank you.