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Intellectuals and Marxism in North Korea

Monday, November 17th, 2008

An interesting quote from the Daily NK:

Until the late 1960s Das Capital, the selected works of Engels and books and publications related to the dialectical materialism and metaphysics were set on my father’s bookshelf.

However, in 1968 or 1969 the authorities took away every book claiming, “Let’s establish Juche.” Since 1970, there was no house where books related to Marx and Engels remained. The only books with regard to an ideology were the analects and selected writings of Kim Il Sung.

The generations that learned Marxism are those who took lectures in universities from 1950 to early 1960s. Since 1967, there have been no lectures on Marxism and no professors who used the publications of Marx.

Since 1970, theories of philosophy or even dialectical materialism have been fabricated as Kim Il Sung’s analects, and theses of Marx and Engels have been revealed as Kim Il Sung’s ones, placing at the forefront the words, “According to the Supreme Leader, Kim Il Sung.”

Finally, later Kim Jong Il even got rid of such things. He made people study only the Juche Ideology as he took away the dialectic. Even the issue on productive forces and their relation to the means of production in the Marxist theory were dealt with in the Juche Ideology. They didn’t teach cadres the dialectical materialism in the Communist College.

The Party omitted the line, “the Chosun Workers’ Party struggles to practice Marxism-Leninism,” replacing it with “the Kim Il Sung Ideology,” at the 6th Party Convention in October, 1980.

Read the full article here:
North Korean Intellectuals Oppressed and Watched
Daily NK
Kim Seo Yeol
10/22/2008

Posted in Education, Juche | 1 Comment »

Famine in North Korea Redux?

Monday, November 3rd, 2008

Peterson Institute Working Paper
WP 08 – October 2008
Stephan Haggard and Marcus Noland

Read the paper here

Abstract: In the 1990s, 600,000 to 1 million North Koreans, or about 3 to 5 percent of the precrisis population, perished in one of the worst famines of the 20th century. North Korea is once again poised on the brink of famine. Although the renewed provision of aid is likely to avert a disaster on the scale of the 1990s, hunger-related deaths are already occurring and a dynamic has been set in motion that will carry the crisis into 2009. North Korea is a complex humanitarian emergency characterized by highly imperfect information. This paper triangulates quantity and price evidence with direct observation to assess food insecurity in North Korea and its causes. We critique the widely cited UN figures and present original data on grain quantities and prices. These data demonstrate that for the first time since the 1990s famine, the aggregate grain balance has gone into deficit. Prices have also risen steeply. The reemergence of pathologies from the famine era is documented through direct observation. Although exogenous shocks have played a role, foreign and domestic policy choices have been key.

Keywords: Famine, North Korea
JEL codes: Q1, O1, P2

Posted in 1990s Famine, Agriculture, Arduous March, Food, General markets (FMR: Farmers Market), Price liberalization, Public Distribiution System (PDS), UN, UN Food and Agriculture Organization, UN World Food Program | 1 Comment »

Pyongyang’s construction boom

Saturday, September 27th, 2008

UPDATE (2009-10-12): Last September (2008), Barbara Demick at the LA Times became the first US journalist to report on Pyongyang’s housing boom. Yonhap now provides some additional information on Pyongyang’s current housing ambitions:

The Chosun Sinbo, which usually conveys Pyongyang’s views, described the housing construction as an “unprecedented national project” and a “core project” in the country’s campaign looking to 2012.

The paper reported that the North was in the process of building 65,000 new houses in the city’s western district of Mangyeongdae, where Kim Il-sung’s birth home is located, 15,000 houses in central Pyongyang and 20,000 houses along the railroad spanning between the southern district of Ryokpo and Ryongsong district in the capital’s northern region.

Each home will be approximately 100 square meters in size, according to the report.

The North Korean capital, despite a strict control on the entry of people from rural areas, has reportedly been going through a major housing shortage. The paper said that the completion of the housing project will solve the problem plaguing the citizens of Pyongyang.

In the past, Pyongyang has built 50,000 new apartments each in the 1980s and the 1990s.

In 2001, North Korea sought to develop a satellite city of some 1 million households near the Mangyeongdae district, but failed due to the nation’s economic woes.

You can read additional DPRK real estate posts here.

Read the full Yonhap story here:
N. Korea building new housing districts in Pyongyang: report
Yonhap
Tony Chang
10/12/2009

ORIGINAL POST (2008-9-27): Los Angeles Times reporter Barbara Demick recently visited the DPRK (with the Committee for Cultural Relations with Foreign Countries) and noticed that Pyongyang is experienceing a bit of a construction boom:

Except for the monuments glorifying leader Kim Jong Il and his father, Kim Il Sung, the founder of North Korea, hardly anything new has gone up in decades. By night, the city is so quiet you can hear a baby crying from far across the Taedong River, which cuts through the center of town.

Yet these days, high-rise apartments in shades of pink are taking shape near the Pueblo, the American spy ship captured in 1968 and still anchored in the river. A tangle of construction cranes juts into the skyline near Pothong Gate, a re-creation of the old city wall. About 100,000 units are to be built over the next four years.

A modernistic silver-sided box of a conference center is already complete. Theaters and hotels are being renovated. Streets have been repaved and buildings repainted.

Even North Korea’s most notorious clunker, an unfinished 105-story hotel that looms vacant over the city, is under construction again after sitting idle for nearly two decades.

All are slated for completion by 2012, the 100th anniversary of the birth of Kim Il Sung. The deadline appears to have taken on new urgency for the appearance-conscious North Koreans, who fret that their capital has become a laughingstock.

“We know we need to modernize. We want to make the city comfortable for the people who live here and for tourists,” said Choe Jong Hun, an official with the Committee for Cultural Relations With Foreign Countries.

North Korean officials insist that they’re funding the building spree on their own, in keeping with an underlying ideology that emphasizes self-reliance.

“If we rely on others, our dreams won’t be realized by 2012. It is all built with our own technology, our own material, our own labor, our own strength,” Choe said.

But analysts are skeptical of such claims, given the nation’s economy and the regime’s secretive nature and often deceptive pronouncements.

“This is a puzzle,” said Yoon Deok-ryong, a South Korean economist who recently visited Pyongyang. “The North Koreans are trying to show the outside world that they are not starving, that they are strong, but we know it is not true, so we wonder where the money is coming from.”

Ms. Demick also speculates on a political reason why Kim Jong il might be financing the construction (beyond the stated policy goal of achieving economic success by 2012):

Expatriate businesspeople in Pyongyang say Kim might also be investing some of his own stash with an eye toward maintaining the loyalty of his Workers’ Party cadres. Apartments under construction look to be aimed at the elite.

Read the full story here:
North Korea in the midst of a mysterious building boom
Los Angeles Times
Barbara Demick
9/27/2008

Posted in 2012 Strong and Prosperous Nation (Kangsong Taeguk), Architecture, Committee for Cultural Relations with Foreign Countries, Real estate | 5 Comments »

Venerable Pomnyun at Johns Hopkins

Tuesday, September 23rd, 2008

UPDATE:Here is V. Pomnyun’s outline: pomnyun.pdf

NKeconWatch notes:
Agriculture: April – June are the lean months. In July 2008 potatoes helped alleviate food shortage. Also aid from West. Things began to get worse in August and September.

Earlier this year, the price of rice was up to 5x higher than a year ago. In June-July it fell to 3x higher. Now it is creeping back up.

Arduous March: In the 1990s, urban residents of North Hamgyong Province was the worst affected by famine. Today, the worst affected are the farmers and rural residents of Hwangae (he did not specify north or south). Shortage as bad as 1st arduous march, but fewer consumers and markets feed cities now.

Markets: protests in Chongjin. People chanted, “Give us food or let us trade.” None of the protests are political, just expressions of frustration.

Nukes:Nuclear weapons are a domestic propaganda weapon as well. Not just a matter of foreign policy.

Original Post:
Program details here
Wednesday, September 24
2:00 – 4:00 pm
Rome Auditorium at SAIS
1619 Massachusetts Ave., NW
Washington, DC 20036
RSVP here

The Venerable Pomnyun Sunim, Chairman of Good Friends and The Peace Foundation, will discuss the current political and social climate in North Korea, including the spread of the black market economy and the increase in political control over North Korea’s elite. Joining his discussion, is Dr. Cho Seong-ryoul, Director of the New Security Studies Program at the Institute for National Security Strategy (INSS), who will offer his insights on current and future inter-Korean relations.

Posted in Agriculture, Arduous March, Food, General markets (FMR: Farmers Market), Good Friends, Uncategorized | Comments Closed

Mass Games to run through October 10

Thursday, September 18th, 2008

According to a recent update from Koryo Tours, this year’s mass games have been extended through October 10th, which is the 63rd Party Founding Day.

This might be the last time for Americans to visit Pyongyang until 2012.

Posted in 2012 Strong and Prosperous Nation (Kangsong Taeguk), Art, Civil society, Koryo Tours, Mass games, Sports, Tourism | 2 Comments »

DPRK statute smorgasbord

Wednesday, September 3rd, 2008

On this page, I will keep a list of DPRK statutes and summaries:

1. Foreign Investment Law
2. Free Economic and Trade Zone Law
3. Equity Joint Venture Law
4. Contractual Joint Venture Law
5. Foreign Enterprises Law
6. Taxation of Foreign Invested Enterprises
7. Relevant Labor Laws
8. Leasing Land
9. Dispute Resolution
10. Domestic Sales Tax Regulations
11. Manufacturing & Export Operations
12. External Economic Arbitration Law
13. Commercial Joint Venture Law
14. Constitutions (x2)
15. Customs Law
16. Law on Economic Plans
17. Fisheries Law
18. Foreigners in FEZs
19. Intellectual Property

Click “read the rest of this entry” below to see summaries and statute text.

(more…)

Posted in Banking, DPRK Policies, Economic reform, Emigration, Finance, Fiscal & monetary policy, Foreign direct investment, Hwanggumphyong and Wihwado Economic Zones (Sinuiju), Intellectual Property, International trade, Joint Ventures, Labor conditions/wages, Manufacturing, Price liberalization, Private property, Rason Economic and Trade Zone (Rajin-Sonbong), Special Economic Zones (Established before 2013), Statutes | Comments Closed

DPRK tightening the reigns in order to secure public finance

Tuesday, August 5th, 2008

Institute for Far Eastern Studies (IFES)
(NK Brief No. 08-8-5-1)
8/5/2008

The latest edition (2008, no. 2) of North Korea’s quarterly economic publication “Economic Research” urged for further regulation of public finance in order to ensure that the public finances necessary for the construction of an ‘Economically Powerful State’ are available.

The journal, which was brought into South Korea on July 29, contained an article titled, “Further Strengthening of Public Finance Regulations at the Present Time [will serve as] Important Collateral to Completely Guarantee the Capital Necessary for Socialist Economic Construction.” In the article, it stressed, “Public finance regulation is one form of state regulation through the monetary sector,” and, “Public financial security for the construction of an economically powerful state varies considerably according to how regulation and distribution functions are carried out.

North Korea has set the goal of construction of a ‘Strong and Prosperous State (Ideologically, Militarily, and Economically Powerful State) by 2012, the 100th anniversary of the birth of the country’s founder, Kim Il Sung. In light of that goal, Pyongyang has prioritized economic prosperity for this year, the 60th anniversary of the DPRK government, calling for a ‘full-scale offensive’ by all the people of the North.

“Economic Research” stresses the following three points for strengthening public finance: 1) further strengthening the coordination of the state’s guidance for economic enterprises, 2) ensuring the utility of economic enterprises, and, most importantly, 3) strictly establishing public finance regulations.

In particular, the establishment of public finance regulations was defined as, “guaranteeing efficient use of capital through the protection and endless expansion of the country’s public financial resources, as well as the complete protection of the capital necessary for state and business operations and efficient elimination of all current misappropriation.” This type of statement makes it appear as if diversion and misappropriation of North Korean finances are regular occurrences.

The journal called for strengthening of management and organization for the financial offices of public finance centers, businesses, and organizations in order to effectively enforce public finance regulations, and for the creation of auditing committees at enterprises and organizations to ensure this takes place.

Posted in 2012 Strong and Prosperous Nation (Kangsong Taeguk), Banking, Domestic publication, Economic reform, Finance, Fiscal & monetary policy, Illicit activities, Institute for Far Eastern Studies | Comments Closed

Next Mass Games in 2012?

Thursday, July 31st, 2008

I received a Koryo Tours email update this morning about the status of future Mass Games performances:

We have just been told by our partners in the DPRK that there is a chance there will be no mass games next year – possibly not even until 2012 which is the next big anniversary (Juche 100 – the 100^th birthday of Kim Il Sung!!!). For Americans this year’s mass games may be the last opportunity to visit the country.

Nothing has been set in stone but we wanted to give you all pre-warning. This year there are 2 different performances – ARIRANG and PROSPER THE MOTHERLAND! – the latter has never been seen before so it really is a once-in-a-lifetime opportunity.

Historically the Mass Games are performed on special anniversary holidays (those in years divisible by 5 or 10). Since 2005 (60th anniversary of victory over Japanese imperialism) they have been held annually. This change could mark a return to the original schedule.

You can subscribe to the Koryo Tours email list here.

Posted in 2012 Strong and Prosperous Nation (Kangsong Taeguk), Art, Civil society, Koryo Tours, Mass games, Sports, Tourism | Comments Closed

Working as a Lawyer in Pyongyang

Sunday, July 27th, 2008

Brendan Carr over at Korea Law Blog dug up some information on law firms operating in the DPRK. All the information he posts is worth reading, but here are some highlights:

[T]he prospect of working as a foreign lawyer in Pyongyang has been on my list since I’ve been a lawyer.

Michael Hay, a foreign legal consultant in Seoul since 1990, actually did this—striking out from “Big Four” firm Bae, Kim, & Lee in 2001 [domain lapsed] to focus on being a full-time North Korea consultant. He established KoreaStrategic Inc. as a consultancy (its domain lapsed in June 2006, though), then with a splash announced the formation of Hay, Kalb & Associates as the first foreign/North Korean joint venture law firm in Pyongyang. The Hay, Kalb website, too, disappeared sometime in 2005, and I lost touch with Mike Hay around the same time. I remain curious to know about his adventure up North; I’m sure it’s been fascinating. However, he was always extremely tight-lipped about what he was doing there. Other than that he was focusing on North Korea “full-time, all the time” it was hard to get any specifics out of him.

There are two other law firms advertising their services and office presence in North Korea: Italy’s Birindelli e Associati (now Chiomenti after being acquired) and Singapore’s Kelvin Chia Partnership.

But today I found that the International Financial Law Review’s IFLR Legalwire, to which I hadn’t previously subscribed, recently (May 2008) reported on Birindelli partner Sara Marchetta’s experiences in Pyongyang. It’s fascinating stuff, published in two parts—go read Part 1 and Part 2. The article gave the impression that Hay, Kalb was still trading, which is promising, but Marchetta says that Birindelli kept no expatriate lawyer there year-round, because there were only four or five clients a year needing legal services, mostly in resource-extraction and processing ventures.

From Marchetta’s interview, I thought the following observations were worth noting:

Obtaining copies of laws:

The first issue is looking for legal resources – the law- as it is extremely complicated to get them. Even if you are a law firm and have people who are well-connected, its still a very long process to get a copy of a law. Even if the law has already been enacted and should be public, you still need special permission. If the law has not yet officially been translated into English, then you need to obtain special permission to get it and translate it.

The second thing is that the intended implementation of the law in a western sense does not exist. Especially when you go out of Pyongyang and Kaesong [North Korea’s special economic zone], everything is pretty much left up to political decision: whether you can stay here or there, what you do and cannot do…

Just to give you an example: in terms of a corporate tax, you go to a place, make an investment and you pay a corporate tax even if you don’t profit. It’s sort of a tax for being there. Corporate tax ends up being interpreted as a presence tax , which is paid independently of whether you make profits or not. In a few cases, we did find this type of interpretation, which is obviously extremely bizarre. So it is really a matter of general legal culture – which is totally lacking – and education of the administrative middle to low levels.

Does [this environment] hinder getting things done? Yes and no. Yes in the sense that getting a deal done takes more time because you do not have all of the information available at the beginning. No in the sense that once there is the intention of getting the deal done, there is a lot of facilitation from the bureaucratic and governmental point of view. If they say yes, its basically yes and it will happen.

How big is your office in Pyongyang:

It is currently staffed with two people. We have no expatriates. It is a joint venture as we are there in cooperation with a DPRK government entity called the Korean Justice Committee [KJC]. It is equivalent to the Chinese Ministry of Justice.

Are your lawyers at the office North Koreans?

Yes, they are North Korean lawyers. One of them is a pure lawyer, the other one is more someone who is well-connected in the government and has also PR and English capabilities. One side has the legal knowledge, and on the other side, fluent in English that they use to work with foreigners.

Does your JV status with the KJC give you an advantage over foreign firms?

As a matter of fact, from an operational point of view: yes. From the client’s point of view, I don’t know. I have no idea. I don’t think this is something that is hindering the expansion of our client base in Pyongyang, but I am not sure if it enhancing it.

What types of clients do you serve?

We serve companies looking at setting up a presence in the DPRK. These are large companies that deal with natural resources, like mining or consumer goods, and most of them have already a presence in China.

What are teh key sectors of Work?

Well we deal with mining projects. This means that yo go there, you test the product and if it’s okay then you give the technology to be extracted in a proper way. You do part of the processing of the mineral and export it. This is one deal. On the other side, before advising on an investment we advise our clients on precessing contracts. Obviously this can be done not just for mining, but for shoes, clothes, and any other product that can be exported. The deal structure is basically these two.

Looking forward, is there enough going on to fairly classify the DPRK as an “emerging market”?

Not in terms of a domestic market. I don’t think that the domestic market is going to develop very much, but the DPRK is a good place for processing contracts. I mean, you send raw materials and they send back the finished product. There is also a strong market for natural resources and low-to-medium technology projects. There, you can produce basic chemicals, basic pharmaceutical products and some consumer goods. The Chinese are doing clothing here, doing shoes, and a lot of other things.

Do you predict enough work growth to expand?

Not for the time being for a number of reasons. One, we do not see an increase in DPRK-related work. We have two, three, four, maximum five clients a year and that’s basically it. So this is the main reason. Then you have always the political issue. It’s always there. The political wind is really swinging a lot and it changes by the season and is very much affected by the situation of the six-party talks. So for the time being, we are looking at what is happening and we are doing what we can do, but we do not have plans to enlarge our presence in the DPRK for the time being.

Posted in 2002 Economic reforms, Chiomenti, DPRK Policies, Economic reform, Foreign direct investment, International trade, Joint Ventures, Kelvin Chia Partnership, Korean Justice Committee, Light Industry, Manufacturing, Mining/Minerals, Statutes | Comments Closed

DPRK bolsters social security laws

Monday, July 21st, 2008

Institute for Far Eastern Studies
NK Brief No. 08-7-17-1
7/17/2008

Recent transformations in the North Korean economy and society have led the government to draft policies to link the social welfare matrix to the social security law. The ‘Democratic Chosun’, a publication of the Central Peoples’ Standing Committee and the Cabinet, has on five occasions (April 3 and 4, May 14, 16, and 23, 2008) run articles titled, “Regarding the Social Security Law,” explaining recent changes to the law and its affects on the North’s social welfare.

This law contains six sections and 49 articles, the purpose of which is to strictly establish the structure and methodology of the nation’s social security system, and to protect the health of the people while providing them with secure and happy lives. Details of the law have not yet been made available.

North Korea established the National Social Security Law on August 30, 1951, although it was not actually enforced until after the April 14, 1978 Socialist Labor Law was passed. North Korea’s social security system is a means with which to control the country’s socialist economy, and also acts to restrict the lives of the people, as well. From when the September 8, 1948 Constitution was passed right up until today, North Korea has provided its people with social insurance and social security systems. Society’s sick, feeble, and handicapped receive treatment assistance or material support from the social insurance system.

By looking at past transitioning countries, one can see that transforming systems and quickly changing social and economic structures lead to linking of social security with social welfare in order to protect the society’s weak. In North Korea, the passing of the July 1, 2002 Economic Management Reform Measures and other sudden changes in the social and economic environments raised concerns regarding the issue of protecting the country’s most vulnerable. Combined with the North’s food shortages, the protection of the society’s elderly, children, pregnant, and other vulnerable elements has become a special issue of concern for North Korean authorities.

NKeconWatch commentary:
This article surprised me. Aside from this post, IFES updates are pretty well researched. Does anyone really believe that the dejure intent and defacto incidence of legislation in North Korea are the same? You would have to be completely ignorant of life in any communist country to actually believe the statement, “From when the September 8, 1948 Constitution was passed right up until today, North Korea has provided its people with social insurance and social security systems. Society’s sick, feeble, and handicapped receive treatment assistance or material support from the social insurance system.”

Not only is health care under-supplied in the DPRK, it is also not provided free-of-charge. I am told by people who have had to obtain health care in the DPRK that you generally have to pay bribes to get access. This was the reality of life in most communist countries. Here is a much better analysis of the supply of health care in the DPRK.

As for the concern of North Korean authorities to maintain a social safety net during a difficult economic transition, this is no doubt true for a number of DPRK policy makers. But the people who actually make decisions are still siding with security hawks who refuse to give aid workers and NGOs the freedom they need to effectively help people.

Posted in 1978 Socialist Labor Law, Domestic publication, Health care, Institute for Far Eastern Studies | Comments Closed

North Korean Economy Watch