Noa Sharabi at the Hanns-Seidel-Foundation Korea office has written up a quick comparison of the 2010 and 2011 Law of the DPRK on the Rason Economic Trade Zone.
You can download a PDF of the comparison here (PDF).
You can download the text of most recent Law on Rason here (PDF).
Here is the original 1993 Law on Rason (in Korean) along with 1999and 2002 revisions (PDF).
Here are previous blog posts on the Law of Rason.
Here is recent coverage of the 2012 Rason International Trade Fair.
Pictured above (Google Earth) is Changsong Town in North Pyongan Province.
There has been a lot of talk about economic reform in the DPRK in recent weeks (see here). One of the aspects of these reforms has been greater local/regional control over economic policies and outcomes.
On August 9, the Daily NK reported that Changsong is “again being put forward as a model for the spontaneous economic development of regional cities and counties as the regime works to foster a different mindset prior to impending economic changes”. According to the article:
On the 8th, Rodong Shinmun published an editorial entitled, ‘Let Our Country Be Prosperous in the Spirit of the Changsung Joint Session’ in an edition that also featured seven other related articles. The articles served as a timely reminder of the joint session of central cadres, their provincial counterparts and economic sector officials held on August 7th and 8th in Changsung County.
[…]
Utilizing the history lesson, Rodong Shinmun emphasized, “The fundamental essence of the Changsung Joint Session was increasing the role of the county in developing regional industry and agricultural accounting, and enhanced the people’s lives by the strength of our household itself.”
It went on, “In every city and district, we must resolve to decisively raise the productivity of our land to solve issues of food insecurity, and must thoroughly implement the Party’s agricultural revolution.”
On days prior, Rodong Shinmun, KCNA and other state-run media outlets also reported in various forms the idea that ‘all the counties in the country are going to follow the example of Changsung County.’ For example, on the 7th it introduced a new food processing plant in Changsung County itself.
Analyzing these moves, Kwon Tae Jin, a researcher with the Korea Rural Economic Institute told Daily NK, “When it comes to the agricultural sector, the county is at the center of everything. This is a way of passing the center’s role to the regions at a time when the center (the Ministry of Agriculture) cannot play its role properly.”
“The purpose of emphasizing the responsibility of the Cabinet and the counties at the same time is to readjust the system,” Kwon added, while the head of North Korea Strategy Center, Kim Kwang In added, “Since the center cannot do what it needs to, they want the regions to deal with survival.”
The move is also intended to raise the likelihood of the 6.28 Policy succeeding. In Kim’s words, “The regime is pushing regional self-reliance prior to the announcement of the new policy.”
I have previously written about the “Changsong Joint Conference” here.
Interestingly, this narrative paints the 6.28 policy as an effort to decentralize economic production because Pyongyang can no longer afford the old policies, yet for propaganda purposes, it is being portrayed as the continuation of a movement personally launched by Kim Il-sung 50 years ago!
Changsong has indeed seen a lot of recent construction. According to KCNA (2012-8-4):
County, Model in Local Economic Development
Pyongyang, August 4 (KCNA) — Changsong County, North Phyongan Province of the DPRK, has become a model in the development of local economy in the new century. Great changes have taken place in all aspects of production and construction in a matter of little over one year.
Local industrial factories have been placed on a modern and scientific basis to lay a firm foundation for reenergizing production and improving the standard of people’s living. The county seat has taken on a new appearance to suit the specific features of a county.
President Kim Il Sung provided field guidance of devotion to the county, once known as remote mountainous county, more than a hundred times in his lifetime with a noble intention to turn it into a model to be followed by all other counties.
There began a new history of mountains of treasures in the county under his care. As a result, the Changsong joint meeting of local party and economic officials was held in the county in August 1962.
Leader Kim Jong Il made sure that the spirit of the joint meeting was fully displayed generation after generation. He gave an instruction to the county to raise a new torch for effecting a dramatic turn in the local industry in November 2010.
The dear respected Marshal Kim Jong Un has led a drive to face-lift the county as required by the building of a thriving nation so that the year 2012, the 50th anniversary of the joint meeting, may shine as a proud year and a year of new changes in the development of local industry.
All local industrial establishments in the county have undergone dramatic changes as required by the new century in a matter of little over one year.
All production processes at the foodstuff factory ranging from feeding of raw materials to packing and forwarding have been automated and its overall processes sterilized to ensure high quality and hygienic safety of products.
Its textile mill has installed new type machines. Technological updating has made brisk headway at all industrial establishments in the county including paper, furniture and chemical and daily necessities factories.
There has sprung up a new food processing factory. All its processes computerized, the factory mass-produces processed meat and vegetables, varieties of soft drink, and confectionary.
A garment factory with big capacity has been built to meet the county’s need for school uniforms and solve the issue of clothing by itself.
The appearance of the county has changed beyond recognition.
The county erected a mosaic depicting the portraits of the smiling peerlessly great persons. The Changsong revolutionary museum and the county hall of culture have been successfully renovated as centers for the education in the revolutionary history and people’s cultural and emotional life.
The Changsong Restaurant and a noodle restaurant built with Korean style roofs in the center of the county seat add to the beautiful landscape of the township.
There sprang up the Undok Health Complex with all welfare and service facilities, a children’s hall, kindergarten and nursery.
The library, county people’s hospital, sanatorium, commercial and catering network, public buildings and dwelling houses have also been renovated as required by the new century.
A great success has been made in the land management.
The eye-opening changes in the county promise a socialist land of bliss where all varieties of consumer goods are mass-produced at the local industrial factories and the people enjoy happiness in their modern houses.
On 2012-8-7, the KCTV evening news broadcast images of some of the new construction:
And on August 8, KCNA reported that Choe Yong-rim visited the town:
Senior DPRK Party and State Officials Visit Changsong County
Pyongyang, August 8 (KCNA) — Senior party and state officials including Choe Yong Rim and officials of party, ministries, national institutions and local party, power and economic bodies visited various places of Changsong County, North Phyongan Province on Wednesday on the occasion of the 50th anniversary of the Changsong joint conference of local party and economic officials.
Changsong County is associated with the leadership feats of President Kim Il Sung and leader Kim Jong Il who opened up a wide road of developing local economy and improving the people’s living standard by increasing the role of county as a regional base.
The participants laid bunches of flowers before the newly erected mosaic depicting portraits of smiling Kim Il Sung and Kim Jong Il and made bows to them.
At the Changsong Revolutionary Museum, they looked round historic relics showing the efforts made by the President and Kim Jong Il who ushered in a new history of mountains of treasures, while giving field guidance to the county.
They also went to local industrial factories in Changsong including Foodstuff Factory, Foodstuff Processing Factory, Furniture Factory, Paper Mill, Jute Bag Factory and Okpho Stockbreeding Farm.
They enjoyed a performance given by the art group of the county at its cultural hall.
Institute for Far Eastern Studies (IFES)
2012-7-19
There is increasing speculation that the new Kim Jong Un regime is pushing toward economic reform. This may be due to Kim’s young age, as he is considered to be more open to change than his father.
According to an unnamed South Korean official, there is a growing prospect that North Korea will soon release a new economic reform measure. More and more testimonies from North Korean defectors suggest that since Kim Jong Il’s death, reform measures are slowly taking place. But it is unclear when such new economic reform measure will occur.
North Korea’s behavior also implies that certain economic reform may occur. The spokesperson for the DPRK’s foreign ministry made a statement last month to the KCNA, “The dear respected Kim Jong Un has already set forth a goal of Korean-style development and strategies and tactics for enabling the Korean people to live well with nothing to desire more in the world. He is now wisely leading the general advance of the Korean people for economic construction and improving the standard of people’s living.” This indirectly suggests that the Kim Jong Un regime will put forth a new economic measure.
On the other hand, the content and timing of such still remains uncertain. According to the NK Intellectuals Solidarity, the Central Committee of Workers’ Party decided on a policy to introduce a new economic management system on August 1, one that would be centered around the cabinet.
What path North Korea will take with the new economic reform is unknown. However, the reform will comprise various economic sectors including agriculture, commerce, production and distribution. Details of the reform are unavailable.
The NK Intellectuals Solidarity predicted that new measures will be centered around the legalization of permitting private investment and commercial activities in service and trade sectors and private contract system for agriculture.
In contrast, Daily NK expects the core of the new economic measure will involve downsizing of cooperative farms (from 10-to-25 people in size to 4-to-6 people) and permit farming in unused lands; enforce government procurement system based on market price and strengthening self-supporting accounting system for companies.
The Choson Sinbo, a Japan-based pro-North Korean newspaper ran an editorial on July 11 that North Korea’s economic revival strategy is to follow the global trend but doing it “our-way.” The news also added that North Korea has already entered the path toward economic restoration and praised Kim Jong Un’s “our-style development goal and strategy” to improve the lives of the people while following the current trend of knowledge-based economy.
The news explicated that emphasis on “following the global trend” did not mean following and copying other nations but aimed for the nation to develop and rise on its own to reach the most advanced level of society. In addition, it is considered a refute against South Korea’s over interpretation about the possibility for opening and reform in North Korea during the Kim Jong Un era.
Before you start reading below, I want to let readers know about a DPRK-specific term: “3rd broadcast”. The “3rd broadcast” is a fixed-wire audio transmission that goes directly into the homes of residents in Pyongyang apartment buildings. In these homes, a speaker is mounted to the wall which broadcasts the information much like a radio would–except the signals are coming from a cable, not radio waves. Because the signal it is not broadcast over radio, it is difficult to know what is being told to the captive audience of Pyongyang residents. This broadcast equipment was featured in the film A State of Mind where the narrator commented “it can be turned down, but it cannot be turned off”.
According to the Daily NK:
North Korea has begun to focus on promoting the appropriateness of the ‘6.28 Policy’, North Korea’s first attempt at economic change since Kim Jong Eun came to power. This is being done via the 3rd Broadcast, and the reports are even utilizing the controversial term “economic reform.”
“They have been talking on the 3rd Broadcast since the beginning of last week about how ‘respected comrade Kim Jong Eun has selected economic reform measures so as to bring our economy up to world class status and greatly improve the people’s lives’,” a source from Chongjin revealed to Daily NK today.
The source explained the 3rd Broadcast content as “sketching out the nature of the reform policy and saying that we must accept and pursue Kim Jong Eun’s economic policy plan.”
…
However, given a history of disappointment, the North Korean people remain skeptical about the policy, the source said.
“Given the barrage of economic reform propaganda we get every single morning, it does seem as though something will happen, but right now it is nothing more than a political sermon; people say that they can only know when actual policies emerge,” the source said.
However, he went on, “It is clearly a change compared to the decades when people couldn’t even speak a word about reform and opening”.
Daily NK previously reported on the presentation of the ‘6.28 Policy’ in citizens’ meetings and that Kim Jong Suk County in Yangkang Province is one of three areas being used to test elements of the policy in advance of full rollout in October.
Previous posts on the 6.28 policy here.
Read the full story here:
3rd Broadcast Promoting Economic Change
Daily NK
Choi Song Min
2012-7-23
Below I have posted some excerpts from a recent Andrei Lankov article on bribery in the DPRK along with the economic bullet points:
Bribery has little to do with ethics or honesty but relative costs and benefits:
The incorruptibility of the old bureaucracy has a rather simple and rational explanation: Most of the time, it did not pay to be a corrupt official under Kim Il-sung. Money was of surprisingly little use in the 1960s and 1970s, when pretty much everything was rationed and distributed by the state according to predetermined quotas and norms.
In those days officials lived significantly better than the average North Korean, no doubt. But they were affluent not because they had significantly more money (the wage differential between a top official and a humble worker was remarkably low), but rather because they had access to higher-quality goods and services that were not available to the common people. One of my North Korean interlocutors said: “Back in the 1980s, I did not care about money. Nobody did, since money did not buy much in those days.” In those days, in the 1970s or 1980s, one had to be an official to drink beer every week, to smoke cigarettes with filters, or feast on pork a few times a month. But officials did not buy these goods at market; rather they received them from the state as part of their special (very special) rations.
In this situation, it did not make sense for an official to accept bribes as a reward for overlooking some misbehavior or violations of some rules. Money would not be particularly useful and at the same time there was a significant risk of being caught. If caught, an unlucky official would at best lose his or her job and at worst even freedom, and no amount of money would compensate for this disaster.
In highly regulated economies, bribery and growth are positively correlated:
We are conditioned to see official corruption as an evil, but in present-day North Korea, corruption might be a life-saver. The average North Korean gets most of his or her income (about 75%, if recent estimates are to be believed) from private economic activities – these include private agriculture, trade and small-scale household production, and myriad other things. Nonetheless, nearly all of these activities remain technically illegal. Unlike China, North Korea has never undertaken serious economic reform, so private economic activities are still considered crimes, even though they have long become, in practice, a universal norm (and without such activities many would be unable to stay alive).
The only reason these activities are able to exist is corruption. Without widespread corruption, many more North Koreans would probably have perished in the great famine because there would have been no way to have private agriculture, and it would have been nearly impossible for private traders to move food across the country, delivering it to areas where the food situation was especially dire. After all, trade in grain and long-distance travel for commercial purposes are both technically crimes. No markets would be possible had the local bureaucracy been serious about enforcing a multitude of bans and restrictions on commercial activities.
Although corruption will lead to low levels of growth, it will impede overall development in the long-term:
Even when the Kim family regime meets its eventual demise, when a new North Korea emerges, the culture of corruption may remain as part of its heritage. And perhaps eventually it will become a serious burden to a resurgent North Korean economy.
Regarding this last point, see this post.
Read the full story here:
North Korea’s culture of bribery
Asia Times
Andrei Lankov
2012-7-13
UPDATE: Read here about increasing numbers of North Korean workers legally taking up work in China.
ORIGINAL POST (2012-6-29): Robert Collins recently published a report with HRNK on the DPRK’s songbun system. Previous posts on Songbun here.
Though some argue that the “Arduous March”, grassroots marketization, and the rise of official corruption has diminished the importance of songbun within the North Korean system, this article in the Daily NK (which never uses the word ‘songbun”) makes the case that it is still important in one highly visible sector: overseas workers.
According to the Daily NK:
A North Hamkyung Province source told Daily NK on the 27th, “The process of choosing expatriate workers is very sensitive, even though the only target is Pyongyang-based factory and enterprise workers.”
According to the source, backgrounds are checked thoroughly, and single people may not take part. Married workers also need to obtain permission from the National Security Agency affiliated to the enterprise with which they are registered.
Prior to sending the workers abroad, the People’s Safety Ministry also checks each individual’s origins, the whereabouts of his or her direct family and if anyone in that family has spent time in a detention facility and why. They also check the marital status and criminal records of more distant relatives.
Despite the hard nature of the work that waits in China and the difficulty of obtaining a position, the number of applicants is huge, the source went on. And with single people ineligible as a measure to decrease the risk of defection, the source even commented that “single workers are rushing to get married,” adding also, “Pyongyang has caught marriage fever.”
“Competition is fierce because they would prefer to go away to a place where factories are running and they can get paid,” he pointed out. “Cadres and NSA agents in charge of the process are doing well out of the bribes. Some people are even borrowing money to bribe the authorities, saying that they will pay them back when they return from China”.
Commenting on the situation, Kim Seung Cheol, a defector who heads North Korea Reform Radio, said it is no surprise. He explained, “This is the only way working people can make any real money. It is similar to the American dream.”
Read the full story here:
Workers Face Fierce Fight for China Role
Daily NK
Choi Song-min
2012-6-29
Pictured above (Google Earth): The location of the Mansugyo Meat and Fish Shop (a.k.a. “Hero Street Meat Shop”) in Pyongyang
Institute for Far Eastern Studies (IFES)
2012-5-2
Recently, new stores are opening in Pyongyang.
On April 26, Kim Jong Un, the first secretary of the Workers’ Party of Korea, congratulated the opening of a meat store in Mansugyo.
The Korean Central News Agency (KCNA) reported on April 26 that the “dear respected Kim Jong Un appeared at the shop to congratulate its opening,” and “looking round the interior of the shop, Kim Jong Un expressed great satisfaction with the soldier builders having built the shop to be loved by the people. He ardently said leader Kim Jong Il would have seen the shop with the highest service level.”
The three-story store covers over 5,000 square meters. The first floor has fresh and frozen fish; the second floor sells beef, pork, goose, turkey, quail and processed foods; and the third floor is equipped with a restaurant serving bulgogi or barbecued beef.
Kim Jong Un is reported to have visited the construction site for the store in January and March and provided guidance over the direction of the project.
On April 27, the KCNA reported that another store, the Mirae Shop for scientists and technicians, opened in Pyongyang. It eulogized Kim Jong Un for naming the shop and commended “his noble intention” for promoting the development of science and technology.
The shop is reported to have a variety of popular goods for sale, including daily necessities, electrical appliances and foodstuffs. In addition, it also boasted its convenient facilities for customers such as alteration and watch repair services as well as elevators and beverage vendors.
On the same day, the KCNA also reported on opening of two other establishments; modern soymilk powder production process of Pyongyang Children’s Foodstuffs Factory and a process for producing sanitary articles at the Pyongyang Cigarette Paper Factory.
The soymilk powder production factory was described as follows: “Employees of the factory, soldier-builders and researchers of Kim Chaek University of Technology manufactured dozens of equipment needed for automatic packing process and the process of carrying and melting sugar powder and installed latest equipment.”
The development of the sanitary products factory was celebrated as an achievement that will meet the needs of women’s daily necessities.
An unknown reader sent in this beautiful Digital Globe satellite image of Pyongyang taken on April 15th, 2012:
Click Image for large version
Photo highlights:
1. Check out the mass rally in Kim Il-sung Square. 영광 (Yonggwang) means “glory”. A tourist made this nice video of the events taking place in the city.
2. The image features the military parade through the newly re-built area of Mansudae street. Looking back, this remains my favorite photo of the construction work (large version here), which was captured by a tourist.
2. The image features the new Kim Il-sung and Kim Jong-il statues on Mansu Hill.
3. The long-abandoned wading pools on Rungra Island have been filled in, but farther north on the island some new water slides are being built. Now some new, unknown construction appears to be taking place at the old location:
Kim Jong-un recently visited the new wading pool and water slides (not visible in the image). According to KCNA:
The next leg of his guidance was the construction site of the Rungra Wading Pool.
The pool consists of water slide with four tracks 18 meters high and more than one hundred meters long, a shower bath site, soft drink stands, dressing room, etc.
He was very pleased to picture to himself the happy school youth and children and working people who will laugh boisterously while fully enjoying wading at the wading pool when completed on the occasion of the day of the victory in the war.
He underlined the need to add a diving tower and different service facilities to the area around the wading pool so that it may be a cultural recreation place for people which will remain impeccable even in the distant future.
You can see pictures of the new pools and water slides here.
4. We also have a good picture of the new 창광원식목욕탕, Changgwang Health Complex (not to be confused with the pre-existing Changgwang Health Complex), and Pyongyang Haedanghwa Center.
5. I tried creating a Google Earth overlay of this image for you to download, but for some reason I can’t get it to work. Only 1/4 of the picture appears on Google Earth. If anyone knows the cause of and solution to this problem, please let me know.
Andrei Lankov writes on the history and evolution of personal income in the DPRK. According to his article in the Asia Times:
When one talks about virtually any country, wages and salaries are one of the most important things to be considered. How much does a clerk or a doctor, a builder or a shopkeeper earn there? What is their survival income, and above what level can a person be considered rich?
Such questions are pertinent to impoverished North Korea, but this is the Hermit Kingdom, so answering such seemingly simple questions creates a whole host of problems.
We could look first at official salaries but this is not easy since statistics on this are never published in North Korea. Nonetheless, it is known from reports of foreign visitors and sojourners that in the 1970s and 1980s, most North Koreans earned between 50 to 100 won per month, with 70 won being the average salary.
Read more below…
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Andrei Lankov writes in the Asia Times:
When one talks about virtually any country, wages and salaries are one of the most important things to be considered. How much does a clerk or a doctor, a builder or a shopkeeper earn there? What is their survival income, and above what level can a person be considered rich?
Such questions are pertinent to impoverished North Korea, but this is the Hermit Kingdom, so answering such seemingly simple questions creates a whole host of problems.
Read the full story below:
