Archive for the ‘DPRK Policies’ Category

Concentration on economic construction based on nuclear deterrance

Thursday, May 9th, 2013

Institute for Far Eastern Studies (IFES)
2013-5-9

The official mouthpiece of the (North) Korean Worker’s Party, Rodong Sinmun, claimed on May 3, 2013 that the key to rapid economic growth was to concentrate on economic construction based on the country’s foundation as a powerful nuclear state and obtaining a powerful nuclear deterrent.

On the same day, it ran an editorial entitled “Our Party Line of Economic Construction and Nuclear Weapons Development Is Permanent”, which claimed that “as demonstrated throughout history, the greatest path to economic construction is developing a reliable nuclear deterrent.”

While this is a restatement of the nuclear weapons development and economic construction plan adopted on March 31 at a plenary session of the Party’s Central Committee, it also indicates that in the future North Korea may focus on capital investment in the economic sector.

The editorial mentioned the importance of developing the nuclear energy industry, uranium resources, and the knowledge and skills of North Korea’s nuclear technicians. It also mentioned that “Kim Il Sung and Kim Jong Il provided us with a robust nuclear energy industry and we possess both inexhaustible supplies of uranium and world-renowned nuclear technicians.” The article also claimed that “the Party’s policy is based on our sovereign right to nuclear power and while developing nuclear weapons, the Party aims to address the issue of insufficient electric power.” This can be seen as an indication that North Korea intends to make use of its nuclear technology in solving its electricity woes.

In respect to the current political situation on the Korean peninsula, the editorial commented, “the current state of affairs in the future is dependent on the attitudes of the enemy that could take a turn toward a nuclear war or appeasement.” It denounced the United States, saying that “whether it adopts a hard line or appeasement policy, its nefarious attitude toward our republic, contriving the collapse of the regime remains unchanged.”

It claimed the only solution to alleviate the tension on the Korean peninsula and to improve relations with the South was through reinforcement of nuclear power and economy which can “ultimately terminate the schemes of the external powers and accelerate our nation’s long-cherished wish of national reunification.”

The principle of self-reliance was named as the imperative strategy to engender major revolution and growth and encouraged “all sectors, ranging from the Workers’ Party to business administration, education, literature and arts, must establish innovative and effective ways that meet the realistic demands of development and overcome schemas and rigidity.”

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Premier Pak Pong-ju attends the first extended cabinet meeting

Friday, May 3rd, 2013

Institute for Far Eastern Studies (IFES)
2013-5-3

On April 22, for the first time since Premier Pak Pong Ju took office as the new Premier of the DPRK Cabinet, North Korea held an extended cabinet plenary meeting. Cabinet members discussed a variety of topics including the economy, enhancing nuclear capability for military purposes, advancing the party line, the results of the National Light Industry Convention, the first quarter assessment of the People’s Economic Development Plan, and adjustments to be made to the People’s Economic Development Plan during the second quarter.

The meeting has spurred interest in what economic breakthroughs will be made under Premier Pak’s direction. While this was only the first extended meeting held since Premier Pak became premier, there appeared to be no fundamental changes in the party line. The results from the last Politburo extended meeting regarding the National Light Industry Convention and the advancement of the party line in the areas of economics and the nuclear program were mirrored in the cabinet meeting. At the meeting, cabinet members emphasized groundbreaking measures that would contribute to improving the lives of the North Korean people.

At the Light Industry Convention, Kim Jong Un ordered for the normalization of operations of factories that produce consumer goods. As Pak was the official in charge, it is likely that he demanded for specific plans to stabilize production.

At the extended cabinet meeting, measures in response to the international sanctions against the country were also discussed. The KCNA reported the results of the meeting: “Foreign economic business must be strengthened to destroy the blockade of the US imperialists and their followers and put forth tasks and measures to explore favorable conditions to become an economic powerhouse.”

In order to avoid the sanctions of the international community, North Korea must continue foreign trade with China and other countries, as covertly as possible.

With respect to the contents of the meeting, Minju Choson, the state-run North Korean government newspaper, reported that “specific plans were discussed to expand the fuel production and restart Yongbyon GMR (graphite moderated reactor), and educational programs for nuclear experts.” In addition, plans for the development of practical and communications satellite were established and reaffirmed in order to continue the launch of long-range ballistic missiles.

North Korea’s long-range missiles, restart of the Yongbyon nuclear facility, and uranium exploration are under the control of the Second Economic Commission, military defense (military economy affairs), not the Cabinet. The Second Economic Committeeis the central coordinating body of the DPRK’s military-defense industry. Yet, the cabinet declared its decision to continue nuclear and missile launches at the cabinet meeting. This would suggest that the cabinet is supportive of Kim Jong Un’s “byungjin line,” or policy of pushing forwarding economic construction and the building of a nuclear force.

Expectations that cabinet reform would be mentioned did not come to fruition. There is a probability that Premier Pak is preparing to implement in earnest the ‘6-28 Economic Management Improvement Policy’ which has been in the works internally since last year.

North Korean leader Kim Jong Un, since delivering the New Year’s Address last January, has promoted Premier Pak as the leader most qualified to execute plans to make North Korea an economic power. However, it is unclear whether Premier Pak will be able to meet such a challenge given the limited reforms in progress and the deterioration of the external situation. On the other hand, Premier Pak chose a cooperative farm for his first site visit which suggests that the North Korean cabinet may concentrate on agricultural sector this year.

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Tanchon Port reconstruction completed

Thursday, April 25th, 2013

Tanchon-port-2012-12-19

Pictured Above (2012-12-13): Tanchon Port

UPDATE 2 (2013-4-25): Yonhap reports on the DPRK’s plans for the Tanchon Port:

North Korea is scurrying to develop the resources-rich city of Tanchon on the east coast as part of the country’s efforts to make it a source of foreign currency income, recent news reports from the North showed.

Tanchon will become a key transit point in shipping goods to and from Russia’s Siberia, the northeastern part of China and Mongolia, said the Wednesday issue of the Choson Sinbo, a Korean language newspaper published by North Korean nationals in Japan.

The newspaper, a mouthpiece of North Korea, said the port city of Tanchon should become the source of finance for the country’s broader policy line of pursuing both economic development and nuclear capacities.
In a bid to boost exports, the country completed the construction of a port in May last year in the city with rich reserves of magnesite, zinc and other mineral resources, which sits about in the middle of the country’s east coast line. the Choson Sinbo said the city has about 5.4 billion tons of magnesite deposit, possibly the third biggest reserve in the world.

The news outlet also highlighted the country’s planned ways to increase earnings in the resources-rich city from which the country used to export mineral resources to China for meager profits.

“North Korea will move to manufacture processed magnesite goods in order to make high-value added goods,” the Choson Sinbo noted. “To that end, many plants will be built in the Tanchon region and the areas will become a new industrial zone.”

North Korean leader Kim Jong-un has also underlined the country’s plan to boost profits from the Tanchon development, saying in a national meeting of light industrial workers last month that profits from Tanchon development should be exclusively used to prop up the livelihood of North Korean people.

UPDATE 1 (2012-5-3): KCNA announces the completion of  the Tanchon Port:

A modern trading port made its appearance in the area of Tanchon in South Hamgyong Province on the occasion of the 100th anniversary of President Kim Il Sung’s birth.

The construction of the port with a cargo traffic capacity of millions of tons provides a guarantee for greatly contributing to developing the nation’s foreign trade and improving the people’s living standard.

A ceremony for the completion of the construction was held on the spot Thursday.

Present there were Choe Yong Rim, Kwak Pom Gi, Ro Tu Chol and other officials concerned, officials of the Ministry of Land and Marine Transport, builders and working people of industrial establishments in Tanchon City.

Read out there was a joint congratulatory message sent by the Central Committee of the Workers’ Party of Korea and the Cabinet of the DPRK to the officials and members of shock brigades who performed labor feats in the construction of the port.

The message highly praised them for successfully building another giant structure in the era of Songun greatly conducive to building an economic power true to the life-time desires and last instructions of President Kim Il Sung and leader Kim Jong Il.

It expressed belief that they would perform greater feats in the efforts for the country’s prosperity united close around the WPK Central Committee headed by the dear respected Kim Jong Un.

Minister of Land and Marine Transport Kang Jong Gwan, in his speech made for the occasion, said the construction of the port was a brilliant fruition of the wise leadership of Kim Jong Il who initiated the construction of the port and worked heart and soul to translate the desire of the President into a reality till the last moments of his revolutionary life and the clear-sighted guidance and meticulous care of Kim Jong Un.

Speakers at the ceremony pledged themselves to carry out their tasks including dredging in a short span of time in the same spirit as displayed in the construction of the port.

At the end of the ceremony the participants looked round different places of the port.

You can see video of the port inauguration here. (KCNA)

Just a few days ago, the Choson Sinbo reported the following (via Yonhap):

The North is estimated to have 15 billion tons of anthracite coal, a key mineral Pyongyang uses to produce steel, the Choson Sinbo newspaper said.

The North also has an estimated 5.4 billion tons of magnesite in Tanchon, a home to mines in South Hamgyong province, and other areas, according to the newspaper.

North Korea is set to open Tanchon as a modern trade port, the newspaper said, without giving any specific time frame for the opening.

ORIGINAL POST (2010-12-9): On December 2, KCNA announced that Kim Jong-il visited the port in Tanchon County, South Hamgyong County (40.412522°, 128.917731°) where he gave guidance on the port’s reconstruction.

Judging by the satellite imagery of the area on Google Earth, it appears that the project had already begun by May 13, 2009, where we can see concrete blocks ready to be used to extend the jettys (breakwaters).  I have outlined the proposed port project on Google Earth imagery below and provided a picture of the completed project from KCTV:

After the jettys are extended, the major construction work and dredging can begin.  Below are images of the port’s main construction site as it appears on Google Earth and a prediction of the project’s conclusion from KCNA:

It appears from the picture that the port will be connected to the railway system—likely via the nearby Tanchon Smeltery and Magnesia Plant (both recently renovated) whose products will probably be exported from the port.

Tanchon is also home to the DPRK’s Komdok and Taehung Youth Hero Mines (among others).  As is well known to readers, raw materials exports are the DPRK’s most significant (legal and transparent) source of hard currency.  According to Yonhap’s North Korea Handbook 2002:

Geomdeok [Komdok] Mine is a special company in Bonsan-dong, Dancheon, South Hamgyeon Province, and is very famous for about 300 million tons of deposited leads and zincs. This mine annually produces 52,000 tons of lead, 124,000 tons of zinc, both of which account for 47% of total production in North Korea, and more than twice as much as the production of Eunpa Mine, North Korea’s second largest mine, in Eunpa-gun North Hwanghae Province. Concentrates of lead and zinc produced from Geomdeok Mine are processed into electric zinc at Dancheon refinery. Opened in 1932, this mine produces 14,200 tons of raw ore annually with three ore dressing plants. Annual production capacity can reach up to 11 million tons. The first dressing plant was completed in July 1953, near the end of the Korean War. It now processes a million tons of ore a year. The second dressing plant was opened with a production capacity of 3,200 tons of ore. The third one constructed in September 1983 can process 10 million tons of ore.

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2013 plenary meeting of WPK Central Committee and 7th session of Supreme People’s Assembly

Monday, April 1st, 2013

On March 31, KCNA reported on the recent plenary meeting of the Korean Worker’s Party:

The historic March, 2013 plenary meeting of the Central Committee of the Workers’ Party of Korea took place at the building of the WPK Central Committee, supreme staff of the Korean revolution, on Sunday.

First Secretary of the WPK Kim Jong Un guided the meeting.

Present at the meeting were members and alternate members of the WPK Central Committee and members of the Central Auditing Commission of the WPK.

Present there as observers were senior officials of ministries, national institutions, provincial, city and county committees of the WPK, complexes, major munitions factories and enterprises.

The participants paid silent tribute to President Kim Il Sung and leader Kim Jong Il.

Taken up for discussion at the meeting were the following agenda items “1. On tasks of our Party on bringing about a decisive turn in accomplishing revolutionary cause of Juche as required by the present situation and the developing revolution”, “2. On personnel affairs issue to be submitted to the 7th Session of the 12th Supreme People’s Assembly” and “3. On organizational matter”.

Kim Jong Un made a report and concluding speech on the first agenda item.

The plenary meeting set forth a new strategic line on carrying out economic construction and building nuclear armed forces simultaneously under the prevailing situation and to meet the legitimate requirement of the developing revolution.

This line is a brilliant succession and development onto a new higher stage of the original line of simultaneously developing economy and national defence that was set forth and had been fully embodied by the great Generalissimos.

It was stressed at the meeting that the party’s new line is not a temporary countermeasure for coping with the rapidly changing situation but a strategic line to be always held fast to, in the supreme interests of the Korean revolution.

The nuclear weapons of Songun Korea are not goods for getting U.S. dollars and they are neither a political bargaining chip nor a thing for economic dealings to be presented to the place of dialogue or be put on the table of negotiations aimed at forcing the DPRK to disarm itself.

The DPRK’s nuclear armed forces represent the nation’s life which can never be abandoned as long as the imperialists and nuclear threats exist on earth. They are a treasure of a reunified country which can never be traded with billions of dollars.

Only when the nuclear shield for self-defence is held fast, will it be possible to shatter the U.S. imperialists’ ambition for annexing the Korean Peninsula by force and making the Korean people modern slaves, firmly defend our ideology, social system and all other socialist treasures won at the cost of blood and safeguard the nation’s right to existence and its time-honored history and brilliant culture.

When the party’s new line is thoroughly carried out, the DPRK will emerge as a great political, military and socialist economic power and a highly-civilized country which steers the era of independence.

The meeting set forth tasks for carrying out the new line and ways for doing so.

All the officials, party members and other people should wage bold offensive and all-people decisive battle with faith in sure victory and strong determination and thus make the flame of miracle and innovation sweep all fields of national economy.

The pilot fields of the national economy, the basic industrial fields should be drastically developed and production be increased to the maximum. Forces should be directed to agriculture and light industry, key fields in building an economic power to improve and put on a stable basis the people’s living standard at the earliest possible date.

The self-reliant nuclear power industry should be developed and the work for developing light water reactor be dynamically promoted to actively contribute to easing the strain on the electricity problem of the country.

Spurs should be given to the development of space science and technology and more advanced satellites including communications satellites be developed and launched.

The country’s economy should be shifted into knowledge-based economy and the foreign trade be made multilateral and diversified and investment be widely introduced.

The economic guidance shall be fundamentally improved as required by the new situation and Korean-style advantageous economic management methods be completed by embodying the Juche idea.

The DPRK’s possession of nukes should be fixed by law and the nuclear armed forces should be expanded and beefed up qualitatively and quantitatively until the denuclearization of the world is realized.

The People’s Army should perfect the war method and operation in the direction of raising the pivotal role of the nuclear armed forces in all aspects concerning the war deterrence and the war strategy, and the nuclear armed forces should always round off the combat posture.

As a responsible nuclear weapons state, the DPRK will make positive efforts to prevent the nuclear proliferation, ensure peace and security in Asia and the rest of the world and realize the denuclearization of the world.

Institutions in charge of security and safeguard, judicial and prosecution and people’s security and the Korean People’s Internal Security Forces should resolutely foil the vicious moves of the imperialist reactionaries and class enemies, devotedly defend the party, social system and people and surely guarantee the new line of the party with arms and by law.

The party and working people’s organizations and power bodies should increase their militant function and role in every way in the struggle for implementing the party’s line.

The meeting entrusted the Presidium of the SPA and the Cabinet with the matters of taking legal, administrative and technical measures for implementing the tasks.

At the meeting a decision on the first agenda item “On carrying out economic construction and building nuclear armed forces simultaneously and thus bringing earlier the final victory in the cause of building a thriving socialist nation” was adopted with unanimous approval.

The second agenda item, personal affairs issue to be submitted to the 7th Session of the 12th SPA, was discussed and decided at the meeting.

The meeting also dealt with an organizational matter, its third agenda item.

Members of the Presidium of the Political Bureau of the WPK Central Committee, members and alternate members of the Political Bureau were recalled and new ones were elected to fill vacancies.

Pak Pong Ju was elected to fill a vacancy of a member of the Political Bureau of the WPK Central Committee.

Hyon Yong Chol, Kim Kyok Sik and Choe Pu Il were elected to fill vacancies of alternate members of the Political Bureau of the WPK Central Committee.

Members and alternate members of the WPK Central Committee were recalled and new ones were elected to fill vacancies.

Upon authorization of Kim Jong Un, Paek Kye Ryong was appointed as director of the Light Industrial Department of the WPK Central Committee and Yun U Chol as editor-in-chief of Rodong Sinmun, organ of the WPK Central Committee.

Members of the Central Auditing Commission of the WPK were also recalled and new ones were elected to fill vacancies.

Here is a video of Kim Jong-un’s speech:

Here is a transcript of the speech in English.

The strategy of pursuing both economic development and nuclear power was highlighted in both the DPRK and international media: Pyongyang Times, Joong Ang Ilbo, New York Times, Yonhap, Choson Ilbo.

Here is analysis from IFES:

Central Committee of the Workers’ Party of Korea Stresses Development of Agricultural, Light, and Nuclear Industries
Institute for Far Eastern Studies (IFES)
2013-4-4

The Korean Central News Agency (KCNA) reported on March 31 that a plenary meeting of the Central Committee of the ruling Workers’ Party of Korea was held. At the meeting, a new strategic line was announced to have been set, which called for building a stronger economy and nuclear arsenal. This meeting is drawing attention as it is suspected that Pyongyang will pursue a new economic policy.

The news described the new strategic line as, “most revolutionary and people oriented policy for the construction of a powerful socialist nation by consolidating defense capacity through development of defensive nuclear weapons and economic construction.”

It stressed that this policy is significant as a “creative and parallel policy for defense and economy continuing the policies of Kim Il Sung and Kim Jong Il, which must be adopted as a permanent strategy.”

At the plenary meeting, the main agendas for the parallel policy of economy and defense were announced as: 1) Improvement of the production of people’s economy and capacity enhancement for agricultural and light industries to stabilize prices to improve the lives of the people; 2) development of self-reliant nuclear power industry and light water reactors; 3) development and launch of more satellites including communication satellites through advancement in space science and technology; 4) transition to knowledge economy and diversification of foreign trade to vitalize foreign investments; and 5) establish legislation to be recognized as a nuclear state and develop nuclear arsenal both in quantity and quality until denuclearization is realized worldwide.

At the plenary, the new parallel policy was commended, “The supremacy of the policy is demonstrated by expanding capability in war deterrence and national defense without increasing defense budget and enabled concentration on economic development and improvement of the lives of the people.”

The statement released by the KCNA stated that the plenary meeting’s emphasis on transition to knowledge economy and diversification of foreign trade as the main tasks and appears to be pursuing a “fundamental improvement in economic leadership.”

In addition, the plenary assigned the presidium of the Supreme Peoples’ Assembly and the Cabinet to serve as the economic control tower to oversee the future projects decided at the plenary meeting.

North Korea is continuing to place emphasis on light and agricultural industries. The Kim Jong Un regime entered its second year. The leader was reported to have attended the light industry conference, which was held for the first time in ten years and underscored the importance of concentrating on development of the capacity of light industry.

The new Korean line, 병진 (Pyongjin, Byungjin) is the simultaneous development of nuclear weapons and the economy. Learn more about it here.

Following the central committee plenary meeting, the 7th Session of the 12th Supreme People’s Assembly was held. According to KCNA:

The Seventh Session of the 12th Supreme People’s Assembly (SPA) of the DPRK took place at the Mansudae Assembly Hall Monday.

Kim Jong Un, first secretary of the Workers’ Party of Korea, first chairman of the National Defence Commission of the DPRK and supreme commander of the Korean People’s Army, was present at the session.

Present there were deputies to the SPA.

Also present there as observers were officials of party, armed forces and power bodies, public organizations, ministries and national institutions and those in the fields of science, education, literature and art, public health and media.

All the participants observed a moment’s silence in memory of President Kim Il Sung and leader Kim Jong Il in humblest reverence.

The session decided the following agenda items of the Seventh Session of the 12th SPA of the DPRK:

1. On amending and supplementing some contents of the Socialist Constitution of the DPRK

2. On adopting the DPRK Law on the Kumsusan Palace of the Sun

3. On adopting the ordinance of the SPA of the DPRK “On Consolidating the Position of Nuclear Weapons State for Self-Defence”

4. On adopting the DPRK Law on Developing Space

5. On adopting the decision of the SPA of the DPRK “On Setting up the DPRK State Space Development Bureau”

6. On the work of the DPRK Cabinet for Juche 101 (2012) and its tasks for Juche 102 (2013)

7. On the review of the fulfillment of the DPRK’s state budget for Juche 101 (2012) and state budget for Juche 102 (2013)

8. Organizational matter

The session discussed the first and second agenda items.

Deputy Kim Yong Nam, president of the Presidium of the DPRK SPA, made a report on amendment and supplement to some contents of the Socialist Constitution of the DPRK and on adopting the law on the Kumsusan Palace of the Sun.

Then followed speeches on the first and second agenda items.

Deputy Kim Ki Nam, secretary of the WPK Central Committee, spoke on behalf of the WPK, Deputy Choe Ryong Hae, director of the General Political Bureau of the KPA, on behalf of the KPA and Deputy Jon Yong Nam, chairman of the C.C., the Kim Il Sung Socialist Youth League, on behalf of the youth.

The speakers fully supported and approved of deliberation and adoption of the draft amendment and supplement to the Socialist Constitution of the DPRK and the law on the Kumsusan Palace of the Sun at the current SPA session reflecting the unanimous feelings of all party members, service personnel and youth across the country.

The ordinances of the SPA of the DPRK “On Amending and Supplementing Some Contents of the Socialist Constitution of the DPRK” and “On Adopting the DPRK Law on the Kumsusan Palace of the Sun” were adopted at the session with the approval of all deputies.

The session discussed the third, fourth and fifth agenda items.

The ordinances of the SPA of the DPRK “On Consolidating the Position of Nuclear Weapons State for Self-Defence” and “On Adopting the DPRK Law on Developing Space” and the decision of the SPA of the DPRK “On Setting Up the DPRK State Space Development Bureau” were adopted at the session with the approval of all deputies.

Deputy Choe Yong Rim, premier of the Cabinet, made a report on the sixth agenda item.

Deputy Choe Kwang Jin, minister of Finance, made a report on the seventh agenda item.

Then followed speeches on the sixth and seventh agenda items. Written speeches were presented at the session.

The speakers noted that the Cabinet work and the fulfillment of the state budget for last year were correctly reviewed and summed up, clear tasks of the Cabinet were set forth to meet the requirements of the general offensive to open an epochal phase in building an economic power at the final stage of the all-out action against the U.S. and the state budget was correctly shaped. They expressed full support and approval of them.

They expressed their determination to reenergize the overall economy of the country, step up the grand advance for improving the standard of people’s living to make loud shouts of hurrah for the Workers’ Party and socialism heard this year marking the 65th anniversary of the DPRK and the 60th anniversary of the victory in the Fatherland Liberation War, true to the historic New Year Address of Kim Jong Un and the decision of the March, 2013 plenary meeting of the WPK Central Committee.

The decision of the SPA of the DPRK “On Approval of the Report on the Work of the DPRK Cabinet and the Review of the Fulfillment of the State Budget for Juche 101 (2012)” and the ordinance of the SPA of the DPRK “On the DPRK’s State Budget for Juche 102 (2013)” were adopted at the session with the approval of all deputies.

The session discussed the organizational matter.

At the session Deputy Choe Yong Rim was recalled from the post of premier of the DPRK Cabinet and Deputy Pak Pong Ju was elected premier of the DPRK Cabinet at the proposal of the WPK Central Committee.

Choe Yong Rim was elected honorary vice-president of the Presidium of the DPRK SPA.

Deputies Kim Jong Gak and Ri Myong Su were recalled from the posts of member of the DPRK National Defence Commission (NDC) due to the transfer to other jobs.

Deputies Kim Kyok Sik and Choe Pu Il were elected members of the DPRK NDC to fill vacancies at the proposal of the WPK Central Committee and the WPK Central Military Commission.

Deputy Thae Hyong Chol was recalled from the post of secretary general of the Presidium of the DPRK SPA and Deputy Hong Son Ok was elected secretary general of the Presidium of the DPRK SPA.

Some members of the Cabinet were relieved of their posts and appointed at the session.

Deputy Pak Pong Ju, premier of the DPRK Cabinet, took an oath at the SPA.

Michael Madden does a great job summarizing the personnel changes made at the party and SPA in this 38 North piece.

The elevation of Pak Pong-ju received much attention in the west: Daily NK, Washington Post, Yonhap, Reuters,

KCNA also issued several reports that stemmed from the SPA meeting:

Report on Adopting Draft Amendment and Supplement to Socialist Constitution and Law on Kumsusan Palace of Sun

Pyongyang, April 1 (KCNA) — Kim Yong Nam, president of the Presidium of the Supreme People’s Assembly, made a report on adopting the draft amendment and supplement to the Socialist Constitution of the DPRK and the law on the Kumsusan Palace of the Sun.

According to the report, the draft amendment and supplement to the Socialist Constitution and the law on the Kumsusan Palace of the Sun to be submitted to the session for discussion will legalize the plan and intention of the Workers’ Party of Korea to fix by law the shining achievements made in accomplishing the cause of perpetuating the memory of the leaders and complete it on a new higher stage.

To be supplemented to the preface of the Socialist Constitution is the sentence which says that the Kumsusan Palace of the Sun where President Kim Il Sung and leader Kim Jong Il lie in state is a grand edifice for the immortality of the leaders, a symbol of the dignity of the whole Korean nation and its eternal sacred temple.

The law on the Kumsusan Palace of the Sun specifies that its noble mission is to preserve and glorify forever the palace, which is the supreme temple of Juche, as the eternal temple of the sun of the entire Korean nation.

The law stipulates that Kim Il Sung and Kim Jong Il will be held in high esteem forever as in their lifetime at the Kumsusan Palace of the Sun and that it is the obligation of all the Koreans to regard the Palace as a symbol of dignity and a great pride of the nation.

It also specifies the state duty to spruce up the Palace in a sublime and perfect way with the state, all-people and nationwide efforts and devotedly safeguard the Palace in every way so that no one can violate.

Also stipulated in the law are matters for carrying out the work of eternally preserving the Palace as the most important state work with consistency, organizing the committee for the eternal preservation of the Palace and preserving for photos, train coaches, cars, boat and other relics and orders which represent the noble lives of the great Generalissimos.

Orders were also set so that Korean people, overseas Koreans and foreigners can pay respects to the great Generalissimos at the Kumsusan Palace of the Sun.

Also mentioned in the law are the matters of establishment of special sanctuary of the Palace for its protection and management as well as the management of buildings in the premise of the palace, park, arboretum, outdoor lighting and lighting facilities and orders concerning the operation of the plaza and the park of the Palace.

It was specified in the law that electricity, facilities, materials and other supplies needed for the Palace shall be planned separately and be provided without fail on a top priority basis. The law also set the duty to be fulfilled by relevant institutions to strictly supervise and control on a regular basis the work for safeguarding, eternally preserving and providing the conditions for the management and operation of the Palace.

The reporter said that the law on the Kumsusan Palace of the Sun is the unique code for the immortality of the leaders, adding that it is the biggest honor for the army and people of the DPRK to have the legal weapon for the immortality of the leaders.

The adoption of the law will serve as a historic occasion for defending and further glorifying the idea on perpetuating the memory of the leaders clarified by the dear respected Kim Jong Un, he stressed.

The reporter said that the Presidium of the Supreme People’s Assembly of the DPRK submits the draft amendment and supplement to the Socialist Constitution and the draft law on the Kumsusan Palace of the Sun to the SPA session for discussion according to Article 95 of the Socialist Constitution.

And…

DPRK’s Law on Kumsusan Palace of Sun Adopted

Pyongyang, April 1 (KCNA) — The DPRK’s Law on the Kumsusan Palace of the Sun was adopted.

The ordinance of the DPRK Supreme People’s Assembly on it was promulgated Monday.

The Kumsusan Palace of the Sun where President Kim Il Sung and leader Kim Jong Il lie in state is the
eternal temple of the sun of the whole Korean nation.

The ordinance says that the SPA decides to adopt this law to eternally preserve and glorify forever the
Kumsusan Palace of the Sun as a grand edifice for the immortality of the leaders symbolic of Kim Il Sung’s and Kim Jong Il’s Korea.

And…

Law on Consolidating Position of Nuclear Weapons State Adopted

Pyongyang, April 1 (KCNA) — A law on consolidating the position of nuclear weapons state for self-defence was adopted in the DPRK.

An ordinance of the Supreme People’s Assembly of the DPRK in this regard was promulgated on Monday.

The ordinance said as follows:

The DPRK is a full-fledged nuclear weapons state capable of beating back any aggressor troops at one strike, firmly defending the socialist system and providing a sure guarantee for the happy life of the people.

Having an independent and just nuclear force, the DPRK put an end to the distress-torn history in which it was subject to outside forces’ aggression and interference and could emerge a socialist power of Juche which no one dares provoke.

The Supreme People’s Assembly of the DPRK decides to consolidate the position of the nuclear weapons state as follows:

1. The nuclear weapons of the DPRK are just means for defence as it was compelled to have access to them to cope with the ever-escalating hostile policy of the U.S. and nuclear threat.

2. They serve the purpose of deterring and repelling the aggression and attack of the enemy against the DPRK and dealing deadly retaliatory blows at the strongholds of aggression until the world is denuclearized.

3. The DPRK shall take practical steps to bolster up the nuclear deterrence and nuclear retaliatory strike power both in quality and quantity to cope with the gravity of the escalating danger of the hostile forces’ aggression and attack.

4. The nuclear weapons of the DPRK can be used only by a final order of the Supreme Commander of the Korean People’s Army to repel invasion or attack from a hostile nuclear weapons state and make retaliatory strikes.

5. The DPRK shall neither use nukes against the non-nuclear states nor threaten them with those weapons unless they join a hostile nuclear weapons state in its invasion and attack on the DPRK.

6. The DPRK shall strictly observe the rules on safekeeping and management of nukes and ensuring the stability of nuclear tests.

7. The DPRK shall establish a mechanism and order for their safekeeping and management so that nukes and their technology, weapon-grade nuclear substance may not leak out illegally.

8. The DPRK shall cooperate in the international efforts for nuclear non-proliferation and safe management of nuclear substance on the principle of mutual respect and equality, depending on the improvement of relations with hostile nuclear weapons states.

9. The DPRK shall strive hard to defuse the danger of a nuclear war and finally build a world without nukes and fully support the international efforts for nuclear disarmament against nuclear arms race.

10. The related institutions shall take thorough practical steps for implementing this ordinance.

And…

DPRK Law on Developing Space Adopted

Pyongyang, April 1 (KCNA) — The Law on Developing Space was adopted in the DPRK.

The ordinance of the DPRK Supreme People’s Assembly on it was promulgated Monday.

And…

DPRK SPA Decides to Set Up State Space Development Bureau

Pyongyang, April 1 (KCNA) — The DPRK decided to set up the State Space Development Bureau.

The decision of the Supreme People’s Assembly (SPA) of the DPRK promulgated on Monday said:

The DPRK is a full-fledged satellite manufacturer and launcher.

It is an invariable stand of the DPRK to develop the country into a world-class space power by exercising its legitimate right to space development for peaceful purposes.

To step up economic construction and improve the people’s standard of living by radically developing the space science and technology of the country and guide and manage all the space activities of the DPRK in a uniform way, the SPA decides as follows:

1. The DPRK State Space Development Bureau shall be set up.

2. The bureau is a state central institution which guides and manages the supervision and control over the working out of a space development program and its implementation and space development work in a uniform way.

3. The Cabinet of the DPRK and other institutions concerned shall take practical measures to implement this decision.

And…

Work of Cabinet for Last Year and Tasks for This Year

Pyongyang, April 1 (KCNA) — At the 7th Session of the 12th Supreme People’s Assembly held on Monday, Deputy and Premier Choe Yong Rim made a report on the last year’s work of the DPRK Cabinet and this year’s tasks.

According to the report, last year electricity and coal production and the volume of railway freight transport increased amid the endeavors to shore up the four pilot fields of the national economy. Increase was also made in the production of a variety of industrial goods, the report said, and went on:

The Kumsusan Palace of the Sun was remodeled to be the supreme temple of Juche, the National Gifts Exhibition House, Pyongyang Folklore Park, Changjon Street, Rungna People’s Pleasure Park and other big edifices in the era of Songun have been built.

Big industrial projects such as the Huichon Power Station, Tanchon Port, Taedonggang Building Materials Factory were completed and technological updating and modernization of major factories and enterprises in the field of metal, machine, chemical and light industries have been pushed forward, consolidating the material and technological foundation of the national economy.

Satellite Kwangmyongsong 3-2 was successfully manufactured and launched and the third underground nuclear test by the use of smaller and lighter A-bomb of great explosive power was successfully conducted.

The bases for the production of cutting-edge technical goods were built and projects for the development of science and technology have been successfully carried out and the modernization of the information and communications field have been stepped up.

A law on the enforcement of the universal 12-year compulsory education was promulgated. This paved a wide avenue for consolidating the socialist education system and raising the quality of education.

In the field of health care, a telemedicine service has been successfully introduced. The DPRK’s players glorified the honor of the country at major international sports events including the 30th Olympic Games and other signal achievements were made in the field of cultural construction.

The reporter said that this year’s tasks are to realize at an early date the lifetime desire of President Kim Il Sung and leader Kim Jong Il, who devoted their whole lives to putting the country’s economy on the level of a prosperous and powerful country and to making the people live with no more to desire in the world.

According to the report, this year the Cabinet will organize the economic work with a main emphasis on solving issues arising in the people’s living by shoring up the pilot fields, the basic industrial field, consolidating the springboard for building an economic power and concentrating all efforts on agriculture and light industry while regarding coal industry and metal industry as key fields.

It is necessary to increase the production of coal.

Technological updating and modernization of iron works and steel works will be stepped up while improving the bases for the production of Juche iron which have already been built in the field of metal industry. Strict measures for supplying raw materials and fuel should be taken to increase the production of rolled steel more than 3.5 times as compared with last year and thus meet the need for steel.

The field of railway transport will ease strain on transport by consolidating the material and technical foundation of railways.

The grain production plan for this year should be carried out without condition.

The whole country should make efforts for the reclamation of Sepho Tideland and the construction of stock-breeding bases and thus complete the creation of grassland within this year.

The production should be put at a high rate at major chemical factories and the percentage of locally available raw materials should be significantly increased. The production at mines, factories and enterprises in Tanchon area should be increased and exports be boosted to ensure in a responsible manner funds for improving the people’s living standard.

Big efforts should be directed to the construction of dwelling houses. Wonsan area should turn into a world-level resort and tourist destination and living environment and conditions be improved in provinces, cities and counties.

The state investment in the field of science and technology should be increased and the flame of industrial revolution in the new century be raised so as to bring about a decisive turn in building an economic power by dint of science and technology.

Ultra-modern technological goods of high competitiveness should be massively researched and developed. Scientific and technological issues arising in the technological updating and modernization of the national economy should be satisfactorily solved.

The state investment will be increased in education and the preparations for enforcing the universal 12-year compulsory education system be rounded off within this year and fresh progress be made in education, public health, literature, arts, sports and all other fields of cultural construction.

All the fields and units of the national economy should build under a long-term plan export bases for producing second-stage and third-stage processed goods and finished goods of high competitiveness at international markets by relying on locally available resources and indigenous technology. Latest scientific and technological achievements should be positively introduced to increase the varieties of exports and remarkably raise their quality.

Trade should be made diversified and multilateral while conducting a variety of trade activities. The joint venture and collaboration should be actively promoted and the work for setting up economic development zones be pushed forward.

And…

Review of Fulfillment of State Budget for Last Year and State Budget for This Year

Pyongyang, April 1 (KCNA) — Deputy Choe Kwang Jin, minister of Finance, made a report on the review of the fulfillment of state budget for last year and the state budget for this year at the 7th Session of the 12th Supreme People’s Assembly held on Monday.

According to the report, the state budgetary revenue last year was over-fulfilled by 1.3 percent, an increase of 10.1 percent over the previous year.

The plan for local budgetary revenue was carried out at 113.8 percent.

The state budgetary expenditure was implemented at 99.6 percent, an increase of 9.7 percent over that in the previous year.

44.8 percent of the total state budgetary expenditure for the economic development and improvement of people’s living standard was used for funding the building of edifices to be presented to the 100th birth anniversary of President Kim Il Sung, the consolidation of the material and technological foundation of Juche-based, modern and self-supporting economy and the work for face-lifting the country.

38.9 percent of total expenditure was spent for enforcing popular policies and measures for social culture under socialism such as the universal free compulsory education system, free healthcare, social insurance and social security, recuperation and relaxation systems as well as those for development of literature and art and building of a sports power.

Some of the total state budgetary expenditure went to national defence.

According to the report, this year’s state budgetary revenue and expenditure have been shaped in such a way as keeping the overall economy afloat and bringing about a decisive turn in stabilizing and improving the standard of people’s living.

The state budgetary revenue is expected to increase 4.1 percent over that last year.

Out of this, the transaction tax, main source of budgetary revenue, is expected to grow 3.5 percent, the revenue from the profits of state enterprises 6 percent, revenue from the profits of cooperative enterprises 5.3 percent, the revenue from the depreciation 2.8 percent and revenue from real estate rent 3.4 percent.

In the total state budgetary revenue, national budgetary revenue will account for 83 percent and local budgetary revenue 17 percent.

Provinces, cities and counties are envisaged to ensure expenditure with local import and put a huge amount of fund into national budget.

The state budgetary expenditure is expected to grow 5.9 percent over last year.

It was decided to increase expenditure in the field of coal, electricity, metal and railway transport 7.2 percent, the field of agriculture and light industry 5.1 percent, basic investment in capital construction and big overhaul 5.8 percent, the field of science and technology 6.7 percent, the field of education 6.8 percent, the field of public health 5.4 percent, the field of social insurance and security 3.7 percent, the field of sports 6.1 percent and the field of culture 2.2 percent.

Some of the total state budgetary expenditure will go for national defence.

A large amount of educational aid fund and stipends will be sent for the education of Korean children in Japan to promote the development of the democratic national education of the General Association of Korean Residents in Japan.

The reporter called for working hard to glorify this significant year marking the 65th anniversary of the DPRK and the 60th anniversary of the victory in the Fatherland Liberation War as a year of gigantic creation and innovations, in hearty response to the historic New Year Address by Kim Jong Un and the decision made at the March, 2013 plenary meeting of the WPK Central Committee.

Here is what Yonhap had to say about the DPRK’s defense budget:

North Korea is expected to spend 16 percent of its budget on national defense in 2013, up 0.2 percentage point from the year before, the country’s state media said Tuesday.

According to the Rodong Sinmun, an organ of the North’s ruling Workers’ Party, Finance Minister Choe Kwang-jin reported to a meeting of the Supreme People’s Assembly in Pyongyang on Monday that the money is needed to effectively cope with “indiscriminate” provocations by the United States and its followers.

The paper, however, did not disclose the exact size of the defense budget, although South Korea’s unification ministry speculated that last year’s military budget totaled US$910 million.

The proportion of the spending plan compared to the overall budget, is the highest tallied since 1998, according to South Korean analysts.

From 1998 through 2002, the North is estimated to have spent 14.4 percent to 14.5 percent of its annual budget on defense, with numbers going up and being fixed at 15.8 percent in the 2007-2012 period, they said.

Additional information:
1. Here and here is KCTV footage of the SPA meeting.

2. Here is a link to all the info for the 6th session of the SPA. It contains links to sessions 1-5 as well.

3. On 5.31 news of economic adjustment measures announced during the meetings was published.

4. The Choson Ilbo and Yonhap report on the new cabinet members.

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Collection of DPRK laws and regulations

Wednesday, March 27th, 2013

A much-appreciated colleague has sent me a PDF document published by the DPRK’s Committee for the Promotion of External Economic Cooperation in 2003. It that contains hundreds of pages of DPRK laws and regulations.

Compilation-of-laws-and-regs-for foreign-investment

Click here to open the PDF document

Here is a list of the contents:

1. The Law of the Democratic People’s Republic of Korea on Foreign Investment

2. The Law of the Democratic People’s Republic of Korea on Equtiy Joint Venture

3. Regulations for the Implementation of the Law on Equity Joint Venture

4. The Law of the Democratic People’s Republic of Korea on Contractual Joint Venture

5. Regulations for the Implementation of the Law on Contractual Joint Venture

6. The Law of the Democratic People’s Republic of Korea on Foreign Exchange Control

7. Regulations for the Implementation of the Law on Foreign Exchange control

8. The Law of the Democratic People’s Republic of Korea on Foreign-Invested Bank

9. The Law of the Democratic People’s Republic of Korea on the Leasing of Land

10. The Law of the Democratic People’s Republic of Korea on Foreign-Invested Business and Foreign Individual Tax

11. Regulations for the Implementation of the Law on Foreign-Invested Business and Foreign Individual Tax

12. The Customs Law of the Democratic People’s Republic of Korea

13. The Law of the Democratic People’s Republic of Korea on the Protection of Environment

14. The Insurance Law of the Democratic People’s Republic of Korea

15. The Law of the Democratic People’s Republic of Korea on External Economic Arbitration

16. The Law of the Democratic People’s Republic of Korea on External Civil Relations

17. The Notary Public Law of the Democratic People’s Republic of Korea

18. The Civil Proceedings Act of the Democratic People’s Republic of Korea

19. The Law of the Democratic People’s Republic of Korea on Processing Trade

20. The Law of the Democratic People’s Republic of Korea on Bankruptcy of Foreign-Invested Enterprises

21. The Law of the Democratic People’s Republic of Korea on the Rason Economic and Trade Zone

22. The Law of the Democratic People’s Republic of Korea on Wholly Foreign-Owned Enterprises

23. Regulations for the Implementation of the Law on Wholly Foreign-Owned Enterprises

24. Regulations on the Financial Management of Foreign Invested Enterprises

25. Regulations on the Introduction of Latest Technologies by Foreign-Invested Enterprises

26. Regulations on the Naming of Foreign-Invested Enterprises

27. Regulations on the Registration of Foreign-Invested Enterprises

28. Labor Regulations for Foreign-Invested Enterprises

29. Regulations on the Resident Representative Offices of Foreign Enterprises in the Rason Economic and Trade Zone

30. Regulations on Entrepot Trade in the Rason Economic and Trade Zone

31. Regulations on Contract Construction in th Rason Economic and Trade Zone

32. Regulations on Forwarding Agency in the Rason Economic and Trade Zone

33. Regulations on Statistics in the Rason Economic and Trade Zone

34. Regulations on Tourism in the Rason Economic and Trade Zone

35. Regulations on Financial Management of Foreign-Invested Enterprises in the Rason Economic and Trade Zone

36. Regulations on Foreigner’s Immigration Procedure and Stay in the Rason Economic and Trade Zone

37. Customs Regulations For the Rason Economic and Trade Zone

38. Regulations on Finding in the Rason Economic and Trade Zone

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DPRK National Nutrition Survey final report

Tuesday, March 19th, 2013

The official UN web page is here.

Here is the description:

Conducted in all provinces of DPRK from September 17th to October 17th, 2012, the National Nutrition Survey was a joint collaboration between DPRK Government, involving the Central Bureau of Statistics (CBS), the Child Nutrition Institute, the MOPH and the National Coordination Committee as well as WHO, WFP and UNICEF.

Amongst others, the results of the survey show that Stunting remains an area of great concern in DPRK. About 28% of Korean children are stunted (Chronic Malnutrition) with provincial disparities. Acute malnutrition (4%) is present and varies according to provinces but even if the prevalence is not alarming, support is still needed to treat these children because of the high mortality risk associated with acute malnutrition. The survey also provides detail on children’s and women’s feeding practices.

You can download a PDF of the report here.

I have added this report to my “DPRK Economics Statistics Page”.

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DPRK Law on Underground Resources

Thursday, January 31st, 2013

The DPRK’s Naenara web page posts PDF copies of the DPRK magazine, International Trade. No updates have been made for 2013, however, Choson Exchange points an interesting article from the Q4 2012 issue which contains interesting information on the DPRK mining sector.

Choson Exchange posted a high resolution .jpg from the most recent issue of International Trade and you can see it here.

The article, “Abundant Underground Resources and the Policy for Their Development,” provides information on the “DPRK Law on Underground Resources” which was allegedly adopted by Decree No. 14 at the fifth session of the ninth Supreme Peoples’ Assembly (1993-4-8: during the Arduous March).

The text of the law is not given, and most of the article is “fluff” language, but here are some interesting tidbits:

Institutions, enterprises and organizations can develop underground resources.  They are obliged not only to make mining equipment large, modern, and high-speed, and diversify transportation but to give priority to tunneling and introduce efficient mining methods to boost mineral output.

Development of underground resources is subject to the approval of the state organ of deliberation of underground resources development .

Institutions, enterprises and organizations engaged in underground resource development shall ensure high efficiency of investment pursuant to the design of underground resource development.

They shall ensure rational organization of mining to excavate ore bodies that conform to mining criterion and standard of calculating deposits of underground resources. But the practices of digging out only high-grade and thick ore bodies in good condition to excavate are prohibited.

Abandoning of ore and coal mines and their pits should be subject to the approval of the state organ of deliberation of underground resource development.

Institutions, enterprises, and organizations, concerned should actively tap the resources of geotherm, underground water and mineral water for the economic development and improvement of people’s [sic] life [sic].

The living environment of inhabitants and ecological environment of animals and plants, including land, resources and landscapes should not be damaged in the course of their development.

The DPRK policy of underground resources development makes a tangible contribution to protection and development of underground resources to fully meet the increasing demands of the national economy for raw materials and fuel, and thus gives the impetus to the building of a thriving socialist country.

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North Korea Lauds Its Economic Achievements One Year After Kim Jong Il’s Death

Friday, December 14th, 2012

Institute for Far Eastern Studies (IFES)
2012-12-14

In preparation for the first anniversary of Kim Jong Il’s death, North Korea is calling attention to its economic achievements.

North Korean media announced that workers in each production sector met the goals of this year to commemorate the death of Kim Jong Il.

The Korean Central News Agency (KCNA) reported on December 7, “To honor the oath of bloody tears made before our Dear Leader Kim Jong Il, with burning hopes to charge ahead to meet the annual People’s Economic Plan, industrial production output reached 100 percent and production of daily necessities reached 113.7 percent, as of December 5.”Specifically, the machinery industrial sector was said to have reached its annual production goal by 107 percent as of the end of November.

Rodong Sinmun, the mouthpiece of the Workers’ Party of Korea (WPK), also mentioned that a product exhibition was held from December 3rd to 6th in the Pyongyang Department Store No. 1.

In addition, KCNA reported that many hydroelectric power plants across the nation have already exceeded the annual electricity production plan. The KCNA claimed that Sodusu power plant exceeded the annual goal by 120.3 percent, while the Hochon River power plant and Jangjin River power plant reached 107.6 and 109.3 percent, respectively.

North Korean media boasted its economic development and spoke of its economic revitalization strategy. In the KCNA commentary: “We have developed our own economic revitalization strategies for economic development and devotion for this goal is deepening with time.”

North Korea’s recent announcement and actual launch of the Kwangmyongsong-3 satellite is also claimed to be an essential process for North Korea’s economic development.

“Unha-3rocket carryingthe satellite Kwangmyongsong-3, was developed by North Korean scientists and engineers by its own technology, and it is a noble achievement for its scientific and technical advancement to realize the goal of economic revival,” stated Choson Sinbo, a Japan-based pro-North Korean newspaper.

Analysts see North Korea’s recent moves (that is, its stressing of economic achievements and the rocket/satellite launch) as Pyongyang’s effort to emphasize the Kim Jong Un regime’s intent to uphold the teachings of the late leader Kim Jong Il through strengthening the economy.

The year 2012 was propagated by North Korea to be the first year of its kangsong taeguk (“strong and prosperous nation”). North Korea is trying to prove to its people that, despite Kim Jong Il’s death, this effort is still continuing under the Kim Jong Un leadership.

In the December 7th article of the KCNA, annual evaluation was made of the various economic achievements. The article called the past year “a historical miracle of a new era,” and “first year of new centennial of juche.” It also stated that a “new historical miracle was created to mark the new era of strong Korea (Chosun) upholding the great teachings of General Kim Jong Il.”

The KCNA mentioned the ‘Day of the Sun’ celebrations and other various celebrations, WPK conference, Kim Jong Un’s onsite visits to military bases, completion of the Huichon Power Station, Pyongyang city park construction, and Moranbong band performances as major achievements of the year.

In addition, the new 12-year compulsory education policy, outstanding performance by North Korean athletes at the 2012 London Olympics (i.e., four gold and one bronze medal), and the commissioning of the new State Culture and SportsGuidance Commission were also mentioned as main accomplishments of the year.

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The credible commitment problem of economic reforms

Tuesday, October 16th, 2012

We have all been watching whether the DPRK will implement economic policy adjustments that strengthen material incentives to farmers, workers and enterprise managers to increase production. I have cataloged many of these stories/articles/observations here.

Today the Daily NK offers a scenario as to why the DPRK has not implemented more generous agricultural production incentives:

A Hyesan-based source explained today, “Cooperative farm cadres are saying that none of the experimental farms will be given 30% of their production this year because it has become difficult to meet the target. They are saying that the harvest is not good and they need to feed the military as a matter of priority, so first they’ll guarantee the military rice then give the rest to the farmers.”

A Shinuiju source corroborated the story, saying that the authorities “haven’t said they are going to take all the production from the farms, but nobody actually thinks they are going to get very much. People who trusted the official words are feeling quite stupid, and nobody is working very hard.”

Back in July, each province designated a number of ‘model farms’ that were to be used to test the policy. These farms were supposed to receive their initial inputs of fertilizer and machinery from the state, and then be given 30% of their production in return.

“They are saying that the state does not have enough rice right now and that there is no choice but to give it to the military, so please try to understand,” the source said. “Farm workers, many of whom had been buoyed by talk of food distribution, are really disappointed, especially since prices are sky high in the market these days.”

Anyone who has taken a game theory class will note the presence of credible commitment problems and backwards induction.

If a game consist of two players (the state, farmers) operating in an environment where credible commitment is not attainable, one could argue that an outcome where the state promises to increase agricultural incomes yet farmers work less is the predictable result. Here is why: If at the beginning of the game the state says “we will raise your incomes if you produce more” and farmers respond by producing more, in the absence of credible commitment, at the end of the game the state can simply take all the increased production and pay no more. There is nothing to force the state to actually keep its word once the increased output has already been produced (assuming policy makers with short time horizons). Of course by utilizing backwards induction farmers realize this and do not increase production despite the promise of higher incomes. In the limit case, the DPRK announces economic policy adjustments, nobody believes them, and nobody moves to increase labor supply in the official sector of the peoples’ economy.

If the DPRK wants to offer effective policy adjustments that lead to real increases in output it must not only promise greater material incentives to workers and managers but it must do so in a believable way. Unfortunately there are no simple mechanisms to credibly bind the hands of the North Korean policy makers within the DPRK. In the absence of suitable constraints on state power (broadly defined), this means that reputation capital is even more important for achieving desired policy goals. This is why the decision to back-peddle on the 6.28 agricultural policies, if this is indeed what happened, is perhaps the most damaging move of all in terms of improving economic performance. Taking the North Korean government at its word (reputation capital), the farmers who increased effort in the fields (expecting a 30% ownership of their output in return) have instead given the state a free lunch. They will not be so inclined to increase output the next time the government comes knocking on their door offering dreams of a chicken in every pot.

If the DPRK government hopes to induce workers to increase labor supply through official channels, relying on nothing more than reputation, it is going to have to pay for failing to live up to its economic commitments in the past. In other words, it is going to have to slowly build up its reputation capital again by increasing the incomes of workers through a policy that is not likely to pay off for several years. It is only after workers again feel confident that the state will not back-peddle on the promise to let them retain 30% of their output that they will increase labor supply and output.

Read the full story here:
6.28 Agriculture Policy on the Back Foot
Daily NK
Lee Sang Yong
2012-10-12

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Hoeryong: New Chinese tourist destination

Monday, October 15th, 2012

 

Pictured Above (Google Earth): Two Google Earth satellite images of Hoeryong (L: 2002-4-27, R: 2008-12-25) which show the construction of residential apartments buildings as well as the town’s new main market.

Hoeryong is a town in North Hamgyong Province that lies across the Tumen (Tuman) River from China.  According to North Korean political narratives it is also the childhood home of Kim Jong-il’s mother, Kim Jong-suk.  It has been the the site of a large construction boom in the last five years, and now, according to the Daily NK, Chinese tourists are being brought in on very limited itineraries. According to the article:

The Hoiryeong source explained, “North Hamkyung Province ‘shock troops’ and military unit construction teams have been here for three years on Kim Jong Il’s orders for the construction, and now it is finished.” Local households were asked to contribute 12,000 North Korean Won each to the construction effort, he added.

Hoiryeong used to have few buildings with five floors, but now it has a considerable number of new four and five floor apartment buildings built around the center of the city, as well as a number of newly built commercial facilities. Buildings in the downtown core have also been spruced up with external lighting, a project that began last April.

There are a number of new restaurants in the area. One, ‘Hoiryeonggwan’, has been decorated in the style of Pyongyang’s famous ‘Okryugwan’, something that Kim Jong Il is said to have ordered in December 2010 when he visited the construction site. Elsewhere, restaurants serving spicy marinated beef, duck, dog and Chinese food have also opened their doors.

However, these restaurants only currently open on the weekend or when Chinese tour groups make an advanced reservation, according to the source, who revealed that local people regard the construction effort more as an attempt to generate tourist revenue than to make it a real ‘model city’, as the official propaganda claims.

“Chinese tourists come, then they visit the statue of Kim Jong Suk and the place where she grew up, and then they are taken to one or other of the restaurants,” the source said. “They drink and make merry then go, all without visiting any scenic spots; thus, the authorities make money.”

As with other tourist operations, it is possible that this small step will lead to a softening of restrictive tourism regulations and potentially the arrival of Western tourists.  But don’t hold your breath!  Chinese tourists have been visiting Sinuiju on a regular basis, but westerners are generally still prohibited from touring the city

Additional Information: 

1. On the opening of Hoeryong’s “Food Avenue”

2. Succession not popular in Hoeryong

Read the full story here:
Model City or Tourist Trap: Hoiryeong Sparkles
Daily NK
Choi Song Min
2012-10-15

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