Oct 2, 2012

13 shocking facts about ordinary people's life in North Korea


I recently finished reading Barbara Demick's Nothing to Envy: Ordinary Lives in North Korea. My understanding of life in North Korea hitherto was based on my interaction with a North Korean defector who was the keynote speaker on our graduation ceremony of summer course in Hong Kong and a couple of documentaries I had watched, most notably the documentary called “Inside North Korea”. This book, in which Demick follows the life of six North Koreans of various walks of life, provided me a much deeper understanding of what it's like to live as an ordinary citizen in the 'Hermit Kingdom'. Here are the 13 facts about life in North Korea that I found shocking:

1. It is compulsory for every household to have the portraits of Kim Il-Sung, Kim Jong-Il and Kim Jong-Un. Nothing else can be hanged on the wall except the portraits, not even the family pictures. The portraits are supposed to be cleaned regularly with the special piece of cloth provided by the government. The authorities can come for a random inspection any day and any time and having a dusty portrait can land you in prison or labour camp.

2. Even in the best of times North Korea can produce only about 60 percent of the food needed for its population, and it currently cannot afford to import the rest. In the 1990s, more than 1,000,000 people died of hunger and starvation. The hospitals however were forbidden to list the cause of death as starvation. When United Nations and other international provided food for the starving population, the food was taken by the army to feed themselves and sell the rest in the black market. The undernourishment has caused a whole generation of North Koreans to have stumped heights and abnormal body structures. A North Korean child on average is 8 inches shorter than his/her South Korean counterpart because of undernourishment.

3. By 1996, even frogs and stray dogs were almost extinct from North Korea because people ate them in absence of any other food. People even ate grass and barks of trees to survive. Several people were executed for cannibalism as well. Majority of the people who stole things from defunct government factories to sell them for food or started a private business to survive during the famines were later executed for violating the 'socialist' principles and 'giving up to the charms of capitalism.'

4. During the 1980s (still is?) North Korea  was chronically short of chemical fertilizer and needed to use human excrement since there were few farm animals. Each  family had to provide a bucketful each week, delivered to a warehouse miles away. In exchange, they were given a chit  certifying that they had done their duty and that chit would later be traded for food. Failure to provide bucketful of human excrement would result in punishment for the family.

5. Less than 1 percent of the population has access to Internet. The 1 percent consists of elite students and government officials. Majority of the population doesn't know what Internet means. Similarly, until recently general people didn't have access to cell-phones. One of the defectors, whose story has been included in the book, was an elite student in the Pyongyang University and after growing tired of the restrictions that denied him access to knowledge defected to China where he for the first time, found out about Internet. He never returned back.

6. All the outside books, publications, films and broadcasts have been banned. Citizens can legally use radios and televisions only after getting a license and after the sets have been pre-fixed to play the nationals stations only. Anyone found tampering with the radio sets and television sets to gain access to foreign, especially South Korean channels is sent to prison. General public doesn't know till date that man has already walked on moon.

7. There are spies everywhere. Spying on one’s countrymen is something of a national pastime.  Neighbours denounce neighbours,friends denounce friends. Even lovers denounce each other.  Even a small complaint regarding the terrible shortage of food or a joke made about Dear Leader during drunken stupor or a critical remark made regarding the news in the television  attracts questioning and gruelling by the Secret Police and often results in imprisonment of the 'offender'. Children are encouraged to spy on their parents. Children ratting out on their parents and relatives are featured as heroes in newspapers and other medias.

8. Ordinary citizens need a travel permit to visit cities or places other than their hometowns like in the medieval Europe. Ordinary citizens rarely get a travel permit to Pyongyang as it is reserved for the bureaucrats and elites of the army.

9. Until the 1990s, girls  weren’t supposed to ride bicycles. There was a social stigma—people thought it unsightly and sexually suggestive—and  periodically the Workers’ Party would issue formal edicts, making it technically illegal.

10. Most of the cities of North Korea have a fictional history. The government has altered the history to undermine the role of Japanese in their development and glorify the Worker's party. Senior people born before the Korean War are forbidden to talk about the history of the cities.

11. North Koreans currently use a calendar known as “Juche Calendar” which begins in 1912  with the birth of Kim Il-sung . So, year 2012 is Juche 100 for North Koreans. Kim Il-sung is the eternal president of the country.

12. Children are taught from their initial years in school that Japanese, American and Christians are evil and war mongers and it is the Great Leader who is saving North Koreans from being killed or harmed. First grade math book has following questions:

“Eight boys and nine girls are singing anthems in praise of Kim Il-sung. How many children are singing in total?” 

“A girl is acting as a messenger to our patriotic troops during the war against the Japanese occupation. She carries  messages in a basket containing five apples, but is stopped by a Japanese soldier at a checkpoint. He steals two of her  apples. How many are left?” 

“Three soldiers from the Korean People’s Army killed thirty American soldiers. How many American soldiers were  killed by each of them if they all killed an equal number of enemy soldiers?”


All of the larger elementary schools have one room set aside for  the purpose of teaching about the Great Leader, called the Kim Il-sung Research Institute. This room is kept clean, bright, and better heated than the rest of the school. The Workers’ Party conduct periodic spot checks  to make sure the school janitors were keeping the place immaculate. The room is treated like a shrine. Even the  kinder-gardeners know they qrenot permitted to giggle, push, or whisper when in the special Kim Il-sung room.

13. The North Korean society is divided into a hierarchy system as discriminative as caste system prevalent in countries like Nepal and India. Every North Korean belongs one of the three categories, namely - the core class, the wavering  class, and the hostile class . Government officials, dictator's family, relatives and favorites, resistance fighters who fought against Japanese and their families, people who fought for North Korea during the Korean war, members of the Worker's Party with trusted loyalty to the dictator fall in the core class and enjoy special privileges accordingly. Wavering classes consist of people whose loyalty to Dear leader is questionable whereas poorer segment of the population, South Korean POW, Japanese sympathizers fall under the hostile class. Hostile class is the first to suffer any persecution brought on by the government and are assigned the toughest and least awarding jobs. Children from hostile class, no matter how good they are, rarely get an opportunity to pursue higher education in major universities or live in Pyongyang. People from hostile class are constantly under surveillance. If a person from core class marries a person from lower classes, his/her prospects of a good career is doomed.

If you have any more information, please share in the comments below!

Oct 1, 2012

Economic Freedom: The Ignored Agenda


The recently released Economic Freedom of the World Report 2012 by Fraser Institute, a prominent think tank in Canada, shows a bleak picture of economic freedom in Nepal. Nepal’s economic freedom, albeit slightly better than the previous year, still has a long way to go. In the study which uses a measure of 42 economic and political components, Nepal is categorized among the least free economies in the world, ranking 110th among 144 countries. Nepal has scored 6.33 out of 10 which is below the world average of 6.83. So much for the notion that Nepal has adopted an open economy since the political changes of 1990s.

For one, the key to most of our economic ailments may lie in the absence of economic freedom. The prolonged transition and the resulting escalation of chaos, anarchy and corruption have thrown Nepal into a turmoil. The people’s movement of 2006 and doing away with monarchy has failed to live up to the promise of better economic opportunities and better living standards. It is time that our discourse brings the hitherto ignored but most essential component for economic prosperity?economic freedom, from fringe to focus.

Empirical studies have shown that societies with higher degree of economic freedom enjoy higher living standards, higher per capita income, higher economic growth rates, higher life expectancy, cleaner environments, lower unemployment rates and lower infant mortality rates. Moreover, the poorest 10% of the population of economically free societies are better off than the poorest 10% living in economically not free societies.

The importance of a free economy is also heightened by the fact that countries like Hong Kong, Singapore, Estonia, which are relatively small and have limited resources, are among the freest economies in the world and have living standards much higher than resourceful countries like Nepal, Congo, and Venezuela. Contrary to the arguments that economies like Nepal are too small to open up and adopt free market, the sample of freest economies in the world suggests that it is the relatively small countries like Nepal that need economic freedom the most. It is so because countries like these have only one thing to count on for development and prosperity: human ingenuity and entrepreneurship that can flourish only under a system that allows economic freedom to individuals.

It is time that we stop blaming countless factors and actors for our poverty and stagnant economy. For too long, Nepalese have been revolting against one or other political agendas and political changes have come frequently too. From autocratic Rana regime, absolute monarchy, constitutional monarchy and parliamentary democracy to republic, the political journey has been long and eventful. Unfortunately, the economic journey has not been equally dynamic. The basic characteristics of the economic system, although slightly changed with political changes, remain largely the same. Contrary to the limited but effective government required for economic freedom, we have unlimited but a pathetically ineffective government. Virtually no sector of the economy has remained untouched by political interference. From decision of where roads will be built to how an educational institution will be directed are fraught with political wrangling.

Similarly, citizen’s equal access to economic opportunities remains a distant dream because of the nepotist tendency of political leaders to hand out favors to their near and dear ones. The access has not been able to go beyond the small circle of elites with close connections to the leaders. The nepotism in political decision making, even in economic matters is far too evident in the way licenses are awarded ranging from hydro-power projects to new transportation routes. Non-competitive practices plaguing the economy, which political leaders and intellectuals often blame on the market economy, are in fact the result of the government’s inability to provide security of life and property of people daring to go against cartels and syndicates. Even more unfortunate is the fact that such practices are still prevalent mainly because they are backed up by the vested interest of political parties.

Politicization of labor in Nepal has become exemplary in the world. Very few places in the world are so anti-investor and anti-entrepreneur. Very few places in the world have labor and trade unions so intent on killing the golden goose called “entrepreneur”. Nepal has scored 3.33 in the Hiring and Minimum Wage regulations, 4.13 in hiring and firing regulations and 2.05 in the mandated cost of worker dismissal. This is definitely not an encouraging scenario for attracting foreign investment and technology in a country with a serious deficiency of capital. Similarly, Nepal has scored 3.22 in the extra payments/bribe/favoritism category making it one of the most corrupt countries in the world.

Hence, economic freedom, the prerequisite for prosperity, remains absolutely ignored in the current political and economic discourse of Nepal. This will not only diminish our prospects of prosperity but also undermine the promises of the countless revolutions we have had so far.

-Surath Giri

Sep 13, 2012

The Secret of the Successful "Socialist" Sweden


Whenever I get engaged in a debate where I argue that mixed economies, although very promising in theory, get too mixed up too work, I invariably face a statement similar to this: "But look at the Scandinavian countries, especially Sweden. Mixed economy and welfare state is working so well there and in fact  doing better than the free market economies."

Well, Sweden seems to be the ultimate example of the promise of welfare state. But is it really? When a well-functioning and sustainable welfare state seems to elude every nation around the  world, Sweden seems to have turned into reality all the rosy promises offered by socialists. What's the secret of the successful socialist Sweden?

Institute of Economic Affairs has recently published a discussion paper by the Swedish author Nima Sanandaji which has tried to explain the secret. The discussion paper entitled "The surprising ingredients of Swedish success – free markets and social cohesion" makes a few points about the Swedish success which are as follows:

Sweden did not become wealthy through social democracy, big government and a large welfare state. It developed economically by adopting free-market policies in the late 19th century and early 20th century. It also benefited from positive cultural norms, including a strong work ethic and high levels of trust.
 
As late as 1950, Swedish tax revenues were still only around 21 per cent of GDP. The policy shift towards a big state and higher taxes occurred mainly during the next thirty years, as taxes increased by almost one per cent of GDP annually.

The rapid growth of the state in the late 1960s and 1970s led to a large decline in Sweden’s  relative economic performance. In 1975, Sweden was the 4th richest industrialized country in terms of GDP per head. By 1993, it had fallen to 14th.

Big government had a devastating impact on entrepreneurship. After 1970, the establishment of new firms dropped significantly. Among the 100 firms with the highest revenues in Sweden in 2004, only two were entrepreneurial Swedish firms founded after 1970, compared with 21 founded before 1913.

Since the economic crisis of the early 1990s, Swedish governments have rolled back the state and introduced market reforms in sectors such as education, health and pensions. Economic freedom has increased in Sweden while it has declined in the UK and USA. Sweden’s relative economic performance has improved accordingly.

Sweden was a poor nation before the 1870s. As a capitalist system evolved out of the agrarian society, the country grew richer. Property rights, free markets and the rule of law, in combination with large numbers of well-educated engineers and entrepreneurs, created an environment in which Sweden enjoyed an unprecedented period of sustained and rapid economic development. In the hundred years following the market liberalization of the late 19th century and the onset of industrialization, Sweden experienced phenomenal economic development (Maddison, 1982). 
 The complete discussion paper can be downloaded here

So what do you think? Feel free to share you views and opinions in the comments below.

Sep 8, 2012

The Kiwi Revolution: How New Zealand transformed itself


Sir Roger Douglas, the Finance Minister of New Zealand during the initial reforms.

I just watched a documentary about the economic reforms and the transformation of New Zealand from one of the most heavily regulated economies until 1984 to one of the freest economies in the world today.

New Zealand is one of the freest economies in the world making it a prime example of how free markets can make create competitive economies and prosperous societies. However, New Zealand didn't always use to be so. In fact, until 1984 it used to be a paradise of the welfare statists as it used to be one of the most heavily regulated economies among the advanced countries in the world. It was also among the first developed countries to introduce welfare programs when Labour government introduced welfare programs in 1930s.

By 1984, however, decades of heavy-handed state interference in the economy and excesses of Prime Minister Muldoon had taken its toll pushing the Kiwi economy to the brink of bankruptcy.

In an ironic twist of events, the Labour government that came to power in the 1984 elections initiated sweeping economic reforms towards a free economy. The reforms were pushed even further by Nationalist government that came into power in 1988 continued it until 1991 transforming New Zealand into what it is today. The reforms, no matter how beneficial, were very painful though. But I was very surprised by the way Kiwi people accepted the reforms and the way both National party and Labour party put aside their ideological agendas and pushed for reforms and even pushed further reforms initiated by the other party.

Here is the documentary in four parts in You Tube. It is a must watch for anyone interested in economic reforms and free market economics.

First episode: Fortress New Zealand


Second episode: The Grand Illusion


Third Episode: The Great Divide


Final episode: The New Country


Happy watching! By the way, what do you think about the economic transformation of New Zealand? Feel free to share your opinions in the comments.

Aug 23, 2012

How to make good policies? : 10 principles


1. A sound policy has government do only what individuals and associations cannot do for themselves.

2. A sound policy considers long-term consequences over all groups of people not just the short terms effects on one group.

3. A sound policy will enhance: choice, competition and freedom.

4. A sound policy focuses on measurable outcomes, not just inputs and good intentions.

5. A sound policy aligns incentives by moving up the hierarchy of Friedman's Law of Spending.


6. A sound policy would enable governance (like decisions about taxes and expenditures) closest to the people.

7. A sound policy would impose the same standards, norms and punishments for non-performance on governments as are imposed on non-state providers.

8. A sound policy will not sacrifice the rights of an individual for the interest of many.

9. A sound policy is based on the premise that people are responsible, resilient, and self-governing given the right set of incentives and framework of law.

10. A sound policy should often have an expiry date (sunset clause).

(Source: Social Change & Public Policy by Parth J. Shah)

Jul 29, 2012

Free People are not Equal


Economic inequality is one of the most popular issues in our political and economic discourses. With the ‘Occupy Wall Street’ movement around the world, the debate has resurfaced in the global scenario too. In our context, totalitarianism is sought after for the sake of equality. The issue, no matter how well-intended, begs for a different perspective.

Opportunities against outcome

Equality of opportunity is indeed a prerequisite for a free society and the government can play a crucial role. Ensuring rule of law, property rights for every class of people and equal access to economic activities are things a government can do to achieve a prosperous society.

On the other hand, equality of outcome sought through government actions is not only antithetical to a free society but also counter- productive to economic growth. Many intellectuals and politicians advocating equality tend to ignore that free people are not equal and equal people are not free.

In a free society, economic outcome largely depends on the talent, intelligence and preferences of an individual. Some people may prefer to work harder and choose a less luxurious lifestyle, whereas some may want a lesser paying endeavour and put more preference on luxury. Some may choose the safety of a regular job with a secure income while  some may wish to take risks and start their own venture. Moreover, what a person earns is determined by the value society is ready to pay for the services he or she offers.

So should it come as a surprise that some street vendors are earning better than a teacher or a clerk? Entrepreneurs, no matter how small, generally earn better than a jobholder but the extra income is usually a compensation for the risk they take and better value they are creating through their services.

Equality versus growth

For a poor country like Nepal, the importance of economic growth is unquestionable. Higher economic growth would mean lower mortality rates, better living standards and longer lives. Countless revolutions have occurred already in the name of bettering people’s lives. Agendas of increasing government control over the economy and lives of people in the name of equality have been in the forefront of these revolutions, which may explain why we have not achieved expected economic growth so far.

Economic freedom, which is a precondition for growth, has largely been ignored in favour of cheap populist agendas like government providing food, shelter, education, health, employment, entertainment and what not. Studies have shown that economic growth and economic equality cannot go hand in hand. This tendency is shown by the increasing inequality in the rapidly growing economies like China and India too. Although lack of equal opportunities in all segments of population contributes more in increasing inequality, economic growth has a part to play in the phenomenon.

On the other hand, re-distributive efforts by the government tends to retard economic growth, making everyone equally poor. The ineffectiveness of government efforts to alleviate poverty is highlighted by the fact that foreign employment has lifted more people out of poverty in less than a decade than the populist government programmes in the past half a century.

Freedom and equality

Huge inequality in a society can be disastrous. High income inequalities encourage rent-seeking behaviour and social unrest. Crony capitalism, which has been flourishing rapidly in Nepal, is a prom-inent contributor in increasing inequality. One of the major causes of crony capitalism is the provision that allows government’s extend-ed intervention in the economy.

Regardless of their objectives, such interventions create the avenues for crony capitalism, which in turn contributes to increasing inequalities in the society.

Hence, our obsession with inequality is going to be counter-productive in the long run, even if our actions are well-intended. It is necessary to bear in mind that society trying to put equality before economic growth will end up keeping everyone equally poor, whereas putting economic freedom first will result in greater growth and equality.

-Surath Giri
(Published on The Himalayan Times - Perspectives of 29th July 2012.)

Jul 20, 2012

दासत्वको बाटो कस्तो हुन्छ (कार्टुन चित्रमा )



 













 माथिका कार्टुनहरु नोबेल पुरस्कार बिजेता एफ ए हाएक को पुस्तक रोड टु सर्फडमको नेपाली अनुवाद 'दासत्वको बाटो' बाट साभार गरिएका हुन । उक्त पुस्तक बजारमा सर्वत्र उपलब्ध छ । ईच्छा लागेमा  पढ्नुहोला । माथिका कार्टुनमा केहि प्रतिकृया भए तल व्यक्त गर्नु होला ।