Archive for the ‘DPRK organizations’ Category

Kim Jong-un’s speech at the SPA in April 2019

Sunday, April 14th, 2019

Benjamin Katzeff Silberstein

Posting the speech here in full, from KCNA:

Pyongyang, April 14 (KCNA) — Supreme Leader Kim Jong Unmade the policy speech “On Socialist Construction and the Internal and External Policies of the Government of the Republic at the Present Stage” at the First Session of the 14th Supreme People’s Assembly of the Democratic People’s Republic of Korea on April 12.

Its full text is as follows:

Dear Deputies,

The First Session of the 14th Supreme People’s Assembly of the Democratic People’s Republic of Korea is convened at a time when the prestige and strength of our Republic advancing along the road of independence are being demonstrated to the full and its socialist construction has entered a very important period.

As the election to the 14th Supreme People’s Assembly was held successfully amid the high political enthusiasm of all the people and with their active participation and the government of the Republic was reorganized, our State power has been further consolidated and the revolutionary advance of our people, who, united with one mind and will around the Workers’ Party of Korea and the government of the Republic, are marching confidently towards a higher goal of socialism, will be further accelerated.

I extend my heartfelt thanks to all the Deputies for having placed, on behalf of all the people, great trust in me so that I would continue to lead the overall work of the State as Chairman of the State Affairs Commission of our glorious country, the Democratic People’s Republic of Korea; and I pledge myself to work with devotion for the development and prosperity of the Republic and the happiness of our people.

Comrades,

Accomplishing the socialist cause under the unfurled banner of modelling the whole society on Kimilsungism-Kimjongilism is a great and historic task facing the government of the Republic.

Modelling the whole society on Kimilsungism-Kimjongilism is the highest programme of our Party and the government of our Republic and the general direction and general goal of the construction of a socialist State.

It is only when we thoroughly apply Kimilsungism-Kimjongilism to State building and activities that we can develop our Republic into the State of the great Comrades Kim Il Sung and Kim Jong Ilfor ever and creditably satisfy our people’s demands for and ideals of independence true to the will and wishes of the great leaders.

The government of our Republic will achieve decisive victory in implementing the socialist cause by conducting more vigorously the struggle for modelling the whole society on Kimilsungism-Kimjongilism.

1

Comrades,

The major fighting task facing us in our efforts for modelling the whole society on Kimilsungism-Kimjongilism is to accomplish the cause of building a powerful socialist country.

Building a powerful socialist country is a historic stage in the struggle for achieving the final victory of socialism, and this can be accomplished with credit only by applying the Kimilsungist-Kimjongilist ideas of State building in a thoroughgoing way.

The Kimilsungist-Kimjongilist ideas of State building contain in a concentrated way the ideas of, and exploits in, State building of the great Comrades Kim Il Sung and Kim Jong Il, who developed our Republic into the most prestigious and strong socialist State in its history; these ideas also indicate clearly the ways and means for accomplishing the socialist cause with the State government as a political weapon.

With the great Kimilsungist-Kimjongilist ideas of State building as the immutable guiding principle, the government of the Republic should raise the country’s strategic position and national strength onto a new high and bring about a fundamental turn in accomplishing the Juche-oriented socialist cause.

The revolutionary line of independence should be carried out in State building and activities.

Independence is the political philosophy of our Republic, and it constitutes the core of the Kimilsungist-Kimjongilist ideas of State building. A socialist State can defend the country’s prestige and people’s destiny and build and perfect socialism as suited to its situation and by its own efforts, only when it maintains the principle of independence and the Juche-oriented stand definitely in all its activities. The great Comrades Kim Il Sung and Kim Jong Il raised independence as the life of the Korean revolution and the fundamental cornerstone for State building and advanced the revolution and construction in our own way while categorically rejecting worship of big countries, dogmatism and the high-handedness and pressure by outside forces. Under their wise leadership our Republic has been built and developed to be a socialist State, independent in politics, self-supporting in the economy and self-reliant in national defence, and it is still demonstrating to the world its prestige and might as a powerful independent country. Its strategic position and influence is being raised day by day as it recently achieved the historic cause of developing the two fronts simultaneously amid a do-or-die confrontation with the imperialists and is leading the trend of situation towards peace. Today the imperialists’ wilful violation of the sovereignty of other countries is growing more undisguised than ever before, and not a few countries are being forced into a miserable plight as they have no strength with which to defend themselves; in this world it is hard to find a country like our Republic that is steadfast in the principle of independence and assures the security of the State and the happiness of the people by its own efforts.

Holding fast to the revolutionary line of independence in State building and activities is a consistent and immutable stand of our Republic.

Geographically, Korea is sandwiched between big countries and its territory remains divided. Our Republic is conducting socialist construction as the hostile forces are resorting to more vicious schemes in trying to contain, undermine and stifle it. On the other hand, the contradictions and confrontations among great powers in their pursuit of hegemony are worsening on a regional and worldwide scale.

Given the special circumstances of our revolution and the complexity of the present world situation, our Republic should build up its own strength from the firm standpoint of independence and seek independent development to defend its sovereignty and dignity and achieve true prosperity. In the past, too, when the world socialist camp existed and the countries concerned maintained cooperative relations to varying degrees, our Republic adhered to self-determination and independence in carrying on the revolution and construction, and promoted socialist construction on the principle of self-reliance. Building socialism by its own efforts according to the revolutionary line of independence is the basic principle our Republic must invariably maintain in State building.

Whatever wind may blow and whatever challenges and difficulties may lie ahead, our Republic will, in the future, too, make no concession or compromise over the issues concerning the fundamental interests of our State and people. It will resolve everything on the strength of self-reliance and self-development, stepping up the building of a powerful socialist country in our own way and by our own efforts.

A crucial factor in applying the revolutionary line of independence to the building and activities of our State is to strengthen the motive force of our revolution and develop all fields of social life in our own way. We should consolidate the country’s politico-ideological position rock-solid by fully equipping the people with the great Juche idea and the spirit of national independence and rallying them firmly behind the Party and the government of our Republic. The government will develop all realms of the economy, defence and culture from the steadfast Juche-oriented stand and in our own way, and it will never tolerate others’ way, others’ fashion, in the slightest.

Our Republic has a bright, promising future ahead, as it is steadily developing on the strong basis of independence, self-sufficiency and self-reliant defence, with the Party and the people achieving solid unity to form the powerful motive force of the revolution.

It is important to apply the people-first principle to the letter in all aspects of State activities and social life.

This principle is a political ideal of regarding the masses of the people as masters of the revolution and construction, relying on them and making selfless, devoted efforts for their interests. It embodies the Juche-oriented revolutionary philosophy that the people are the most precious and powerful beings in the world; it reflects the unwavering commitment of our Party and the government of our Republic to love the people dearly and satisfy their demands and interests.

The people are the roots of our socialist State and its foundation; they are responsible for developing it. All the activities of Party and government organs should be thoroughly oriented and subordinated to safeguarding and realizing the people’s demands and interests and faithfully serving them-this is just the way to promote the revolution and construction with success and bring the viability and advantages of socialism into full play.

Maintaining the viewpoint and attitude of prioritizing the people in the activities of the State presents itself as an important matter, in view of the fact that abuses of power, bureaucratism and other violations of their interests may appear among officials in the course of socialist construction. The impertinent practices of lording it over the people and abusing the authority vested by them will impair the prestige of socialism and its people-oriented character, and weaken the people’s support for and trust in the Party and the State. They may end up threatening the very existence of our socialist system.

With a view to carrying forward and holding up the ennobling ideas and intentions of the great leaders, who believed in the people as in heaven and devoted their lives to their interests, our Party defined the essence of Kimilsungism-Kimjongilism, the guiding ideology of our revolution, as the people-first principle and set it as the greatest priority to apply the Juche-oriented view on the people, a people-oriented philosophy, in the activities of the Party and the State.

The slogan “Everything for the people and everything by relying on them!” encapsulates the people-first principle maintained by our Party and the government of our Republic. In all spheres of State and social life we have given top and absolute priority to what are oriented to the people and popular among them, unsparingly investing everything for their wellbeing. Over recent years our State has implemented gigantic construction projects in a bold manner. This is not because there is a surplus of funds in the country’s coffers; those projects are aimed at providing our people, who are the best in the world, with better conditions for a happy, cultured life.

Our Party and the government of our Republic have resolutely declared a war against abuses of power, bureaucratism and corruption, which are infringing upon the people’s interests, and waged an intensive struggle against such practices, taking it as a matter with a vital bearing on the existence of our State.

In the course of the endeavour to apply the people-first principle in all the activities of the Party and the State and in all fields of social life, the Party, the State and the people have formed a community in which they share the same destiny with one another; our Republic has advanced dynamically along the orbit of its development, never flinching in the face of unprecedented trials and difficulties.

As socialist construction is progressing, we should direct closer attention to applying the people-first principle. Then we can double the dynamic for the advancement of our revolution and continue to demonstrate the advantages peculiar to our style of socialism, those which other countries cannot imitate.

The Party and the State make selfless, devoted efforts for the good of the people, and the people support their Party and State whole-heartedly, entrusting their destiny and future entirely to the latter-these are the genuine features of our State embodying the people-first principle.

The government of the Republic will invariably hold fast to the people-first principle as the core of its mainstay, and strive to hasten the bright future of socialism aspired after by the people by relying on their strength.

Party leadership over the overall affairs of the State should be provided in every way possible.

Party leadership is the intrinsic requirement of the building of a socialist State and lifeline of its activities. Only under the leadership of a party, the incarnation of the demands and interests of the masses, can the socialist State perform its mission as their servant with credit and properly organize and undertake unified guidance over all realms of social life and all regions and the overall socialist construction. A socialist government, not led by a revolutionary party, will lose its intrinsic nature and fall prey to the reactionaries and plotters, with the result that its people cannot escape the pitiful plight of a political orphan.

Our Party is the veteran and seasoned General Staff of the revolution, which has gained rich experience and outstanding leadership skills and abilities in the course of leading the several stages of social revolution and socialist construction. What instils boundless dignity and confidence in sure victory in our people is the leadership of our Party, which is bringing about world-startling, miraculous achievements one after another while leading the gigantic campaign of creation for building a powerful socialist country amid acute confrontation with the hostile forces.

Party leadership over State activities should be consistently based on political guidance, policy-oriented guidance. The Party is the guiding force that provides guidelines to be followed by the socialist government and guides all State activities so that they are properly conducted; the State is the executor and performer of the Party’s lines and policies. Proceeding from these interrelations between the Party and the government, our Party has shown close concern over encouraging its organizations to exercise unified control over the affairs of their sectors and units and give political and policy-oriented guidance over them in the efforts to materialize its leadership over State activities. If the Party, a political leadership body, is involved in the administrative work and resorts to technical methods, it will not only deviate from its main principle but paralyse the functions of administrative organs and impair its authority, ending up making a mess of the revolution and construction.

At present, the government of our Republic is satisfactorily effecting unified leadership over the State and society by relying on the revolutionary guiding ideology and scientific strategy and tactics advanced by the Workers’ Party of Korea. In the future, too, it should remain faithful to the Party’s ideas and leadership, so as to perform its missions of representing the rights of the masses of the people to independence, organizing their creative abilities and activities, taking care of their lives and protecting their interests.

When it strictly adheres to the ideas and principles of building a socialist State elucidated by Kimilsungism-Kimjongilism, our Republic will be built more splendidly as an independent powerful State that no one can dare provoke, a people’s State in which the people’s ideals are fully realized and a great State that leads the world by giving full scope to its unlimited potential for development, and the victory of the socialist cause will be brought closer.

2

Comrades,

The central task facing our Republic at the present stage of the struggle to build a powerful socialist country is to solidify the material foundations of socialism by concentrating all national resources on economic construction.

Economic self-sufficiency is a material guarantee and prerequisite for building an independent State. Only by relying on independent and strong economic capability, it is possible to defend the dignity of a State and increase its political and military might on a steady basis.

The present political situation demands that our State hold higher the banner of self-sufficiency and self-reliance.

Recently, the United States has grown fearful of the threats posed by our rapidly-developing nuclear armed force to the security of its mainland. At the negotiating table, it has made much ado about improved relations and peace; on the other hand, it is resorting to all conceivable schemes in trying to prolong the economic sanctions, with the aim of preventing us from following the path of our own choice and disarming us first to create conditions for realizing its ambition of overthrowing our social system. Now that it is raising demands that run counter to the fundamental interests of our State, as a prerequisite for lifting the above sanctions, the confrontation between our country and the United States is bound to be drawn out and the hostile forces’ sanctions will persist. We have built socialism in the face of their constant sanctions, but we must neither become accustomed to this nor slacken the speed of advance of our revolution. To the forces who cannot thwart us by force, sanctions are a last resort. However, these are an intolerable challenge to us; we must never connive at or remain indifferent to them, but act resolutely to frustrate them. As we put an end to the prolonged nuclear threat by dint of nukes, we must frustrate the hostile forces’ sanctions on the strength of self-sufficiency and self-reliance.

We have the capabilities and foundations for independent development to revitalize the national economy and raise it to the advanced international level in the shortest possible period. The foundations of our self-supporting economy that have been laid for several decades, able scientific and technical personnel, and the creative strength of the heroic people who have made self-reliance part of their mental qualities and are brimming with patriotic enthusiasm-these constitute our valuable strategic resources. By making the most of these enormous and unlimited potentialities, we must create another legendary tale of world-startling, miraculous successes and go ahead of others by making a greater leap forward.

When we adhere to the line of building an independent national economy and give full play to the revolutionary spirit of self-reliance, we can achieve remarkable development with a strength that others can neither fathom nor imagine.

The strategic policy pursued by our Party and the government of our Republic in promoting socialist economic construction is to make the national economy Juche-oriented, modern, IT-based and scientific.

The independence and Juche character of the national economy should be consolidated in every way possible.

We must strive hard to achieve self-sufficiency in power, fuel and raw materials, which constitute the basic guarantee for independent economic development.

The electric-power industry should maintain and strengthen the existing bases to maximize the production of electricity, put power supply on a scientific and rational basis, and actively develop the hydraulic, tidal, atomic and other promising sources of energy so as to create greater generating capacity.

Coal and other mines, which are in charge of the primary front for economic development, should give precedence to prospecting and tunnelling, and concentrate their efforts on realizing mechanization of extracting and transport, thus extensively increasing the production of coal, the food of industry, and minerals.

The metallurgical industry should establish a new modern yet large-scale iron production system that suits our actual situation by solving the scientific and technological problems arising at the Juche-oriented iron production bases and operating them properly. The chemical industry should turn itself into a Juche-oriented, energy- and labour-saving industry that totally relies on locally available raw and other materials. By doing so, it should meet the domestic demands for fertilizer, chemical fibre, synthetic plastics and various other chemical goods.

The problems of food and consumer goods, which are of decisive importance in the improvement of the people’s living, should be solved in the earliest period.

The agricultural sector should pay special attention to solving the problems of seed, fertilizer and water and securing the land under cultivation, introduce scientific farming methods and raise the rate of mechanization of farm work, and thus attain without fail the grain production target set by the Party. The stockbreeding bases such as chicken and pig farms should be modernly built or renovated, domestic animals be raised in a scientific way, and a mass movement be launched to raise grass-eating animals perseveringly. Also, a turn should be made in the production and processing of seafood by consolidating the material and technical foundations of the fishing industry.

The light industry establishments should hold fast to recycling as one of their strategies, along with the strategy of relying on locally-available raw and other materials, step up modernization of their production lines and invest great efforts in developing new products. In this way, it should ensure that larger amounts and various kinds of quality consumer goods are supplied to the people.

We should carry on grand construction projects more vigorously to provide the people with more affluent and cultured living conditions. The construction sector should make innovations in architectural designing and construction method and improve the level of technical equipment of construction units to build world-class architectural structures in a larger number. The building-materials industry should build up the capacity of cement production and decisively raise the proportion of domestically-produced finishing materials.

The transport sector should adopt revolutionary measures for improving rail and water transport in conformity with the actual conditions in our country and resolve the problem of passenger transport in the capital city and provincial seats in our own way.

We should improve the structure of the national economy still further, develop all its branches in a harmonious way and secure the international competitive edge in the magnesia and graphite industries and other promising economic sectors.

We should make proactive efforts to put the national economy on a modern and IT footing so as to transform the country’s economy definitely into one that is knowledge-based.

We should work out strategies and targets for developing hi-tech industries including the machine-building, electronics, information, nanotechnology and biological industries, and concentrate investment on them. Every sector should build a parent, standard factory in which science and technology are integrated with production and all production lines are made remote-controlled, intelligent and fully automated and generalize its experiences, so as to raise the overall economy to the advanced level of the world.

We should develop the local economy and reenergize the external economic work.

Provinces, cities and counties should build and develop the economy with their own distinctiveness by giving full scope to their natural and geographical advantages and properly sustaining their economic, technical and traditional characteristics. The State should empower the local authorities to stand on their own feet and develop by themselves, and adopt relevant practical measures.

The external economic sector should conduct external economic cooperation, technical exchanges and trading activities in a multifarious, proactive and tactical way on the principle of strictly abiding by the line of building an independent national economy and in the direction of reinforcing the fields and links essential in strengthening the country’s economic foundations.

In order to give full play to the potentials of the self-supporting socialist economy, comprehensive measures should be taken to enlist all the human and material resources and potentialities of the country in a coordinated way and utilize the new elements and driving force for economic development.

The economic work of the country should be conducted under the State’s unified control and supervision, and in accordance with its strategic plan and command.

We should adopt a scientific and practical strategy and phased plans for the economic development of the State and execute them without fail. The structural and work system should be adjusted so that enterprises can arrange and conduct production and management activities smoothly while fully satisfying the needs of the State’s unified guidance over and strategic management of the economic work.

The State’s institutional and legal conditions and environment concerning economic affairs should be improved and an iron discipline be established so that the economic organs and enterprises give priority to the national interests and the promotion of the people’s wellbeing and observe the law and order strictly.

We should further improve planning in compliance with the essential requirements of the socialist economy and deal with pricing, monetary and financial matters-the important links in the whole chain of economic management-in accordance with the economic principles and laws and in such a way as to reap profit in reality. By so doing we can encourage the enterprises and producers to work with great interest and high enthusiasm. Measures should be taken to conduct the economic management on the basis of scientific calculation so that optimum results can be obtained. Raw and other materials, funds and manpower should be economized as much as possible and the expenditure be made cost-effective so that all the resources of the country may contribute to the development of the State to the maximum.

The main force that propels a self-supporting economy is the talented personnel and science and technology.

We should make it part of the national social practices to attach importance to the talented personnel and science and technology, identify and appoint the talented personnel to the appropriate posts so that they may lead production and the development of technology; and we should steadily increase State investment in the field of science and technology.

We should make proper decisions on major scientific and technological tasks and projects, strategic, pivotal, profitable and economically important, and concentrate our forces and funds on them to ensure that science and technology may render decisive services to reenergizing the overall economy and developing the hi-tech industry.

We should build up the political and military might of our Republic.

Our political and ideological might is based on the advantages and stability of the political system of our socialist State. We should substantially provide all the people with genuine political rights and dignity and give full play to the political and ideological advantages of our system, in which the whole country, united in ideology, purpose and moral obligation, makes uninterrupted progress.

The government of the Republic should regard the people’s interests as the absolute standard and give the first consideration to their will and desire in formulating and carrying out its policies; in this way, we can encourage the broad sections of the working masses including workers, farmers and intellectuals to take active part in the management of the State and society as befits the genuine masters of State administration.

The government should give definite precedence to the political and ideological work as required by the intrinsic nature of the socialist society, so as to train all members of society as true advocates of Kimilsungism-Kimjongilism and further consolidate the political and ideological unity and cohesion of our State.

The government of the Republic should perfect the legal system of the State and intensify the role of law in State and social life.

The laws of the Republic are powerful weapons for defending the gains of the revolution, consolidating and developing the socialist system and championing and guaranteeing the people’s rights and interests. In keeping with the intensification of the revolution and construction, the laws and regulations should be subdivided and specified on the basis of the requirements of the Party’s policies and in reflection of the prevailing realities so as to legislate and perfect them in a scientific way; they should be modified and supplemented in good time, so that they can reliably guarantee the administration of the people-oriented politics of the socialist State. It is necessary to thoroughly establish a habit of observing the socialist laws throughout society so that all the people respect the State laws with a noble sense of law observance and abide by them on a voluntary and obligatory basis; law-enforcement organs should enhance their role, never allow double standards of discipline in enforcing laws and strictly adhere to scientific accuracy, objectivity, impartiality and prudence in applying laws; in this way, we should turn ours into the most advantageous socialist law-governed State in which laws safeguard the people and the latter observe the former.

The self-reliant defence capability is a powerful and valuable weapon for defending the sovereignty of our Republic.

The peace-oriented atmosphere that has begun to be created on the Korean peninsula is not stable, and the hostile forces have not given up their attempt to invade our Republic. Always keeping in mind the iron truth that peace can be guaranteed only by powerful military strength, we should hold fast to the principle of self-reliant defence and keep building up the country’s defence capability.

The government of the Republic will provide, on a preferential basis and in full, the human and material resources necessary for strengthening the People’s Army, arming all the people and fortifying the whole country, and steadily raise the national defence capability by putting the defence industry on a highly Juche-oriented and modern footing.

Socialist culture should be developed in our own way.

It is important to create a climate of giving top priority to education throughout the country and bring about a radical improvement in education in our own way so as to overtake the developed countries in the educational level. The educational sector should strengthen the ranks of teachers, improve the quality of education as demanded by the trend of developing modern education, and thus train larger numbers of talented personnel who will shoulder the scientific and technological development of the country and socialist construction.

Upholding the slogan of making all the people well versed in science and technology, we should enrol all the working people in the study-while-you-work system and prepare them as intelligent workers.

The government of the Republic should give special attention to the socialist health service. It should further improve medical service, raise medical science and technology to the cutting-edge standard and consolidate the material and technical foundations of the health service sector, thereby bringing greater benefits of our country’s socialist healthcare system to the people.

The sector of culture and arts should create larger numbers of masterpieces that represent the demands of the times and aspirations of the people, and the sector of cinematic art, in particular, should kindle the flames of effecting an upsurge in film-making in the new century, thus playing the role of pacesetter in opening up a new heyday of the development of socialist culture.

Sports play a very important role in consolidating a nation’s strength and exalting its resourcefulness and prestige. A nationwide effort should be directed to developing sports science and specialized sporting techniques and organizing the mass-based sports activities on a wide scale. At the same time, sports facilities should be increased in number and the existing ones renovated with an eye to satisfactorily hosting even international games.

Establishing a socialist way of life and moral discipline is a severe political struggle and an acute class struggle to safeguard and add lustre to our ideology and system.

We should encourage all the members of society, with a high sense of pride and self-confidence that our culture, our way of life and our morality are the best, to give full play to the collectivist way of life and moral traits and actively create and fully enjoy the revolutionary and optimistic cultured way of life of our style as suited to the aesthetic sensibilities of today that aspire after cultural development. We should firmly defend the ideological and cultural position of our State by strictly guarding against any slightest expression of immoral and alien phenomena that poison the people spiritually and degenerate and debase society, improving ideological education and struggle and intensifying legal sanctions against them.

In order to successfully carry out the enormous revolutionary tasks facing the government of the Republic, people’s government organs should enhance their functions and roles.

They should further intensify their unified guidance over the whole society as required by the developing revolution.

They should consolidate and develop the socialist political system and carry on the work of accelerating economic and cultural construction. In particular, they should give precedence to economic work and concentrate their efforts on improving the people’s living standards. They should put every realm of social life and every region under their supervision and provide unified guidance over them while giving free rein to the creativity of individual sectors and units.

People’s government organs should establish the trait of making selfless, devoted efforts for the good of the people as appropriate to their basic duty.

They should always pay heed to the people’s opinions, plan and organize their work in reflection of their demands, find what can be done for them and carry it through to completion, and enlist them in carrying out the Party’s lines and policies. They should give top priority to the people’s interests and comfort and take responsible care of their living.

They should properly enforce the advantageous people-oriented policies including free compulsory education and free medical care, which General

Kim Jong Il pursued invariably even in the most trying days, so that the people can feel keenly the gratefulness of the socialist country in their daily life and turn out in the efforts for achieving its prosperity.

People’s government organs should maintain it as the iron rule to work only under the Party’s leadership.

They should organize and carry on all work with the Party’s ideas and policies as the yardstick, proactively defend the Party’s policies and implement with credit the revolutionary tasks advanced by the Party, thereby giving full play to the validity of our Party’s policies. Party organizations at all levels should intensify collective guidance over the activities of government organs in conformity with the demands of the developing revolution and actively encourage all their officials to perform their responsibilities and basic duties for the revolution.

Officials of people’s government organs at all levels should enhance their sense of responsibility and roles.

The present stirring realities urgently demand that our officials take the lead in the general offensive and wage a vigorous struggle in order to discharge their duties as befits the leading personnel of the revolution.

Officials of people’s government organs should possess a high degree of Party spirit and revolutionary principle and conduct their work in a daring and active manner with the attitude that they are fully responsible for it. Courage and activeness arise out of trust in the Party, whereas timidity and acts of basing their actions on how people look at them result from lack of trust in the Party. Officials of people’s government organs should definitely root out passive approaches of expediting their work only when the Party throws its full weight behind them, and cherish an unyielding revolutionary work style of carrying through the task set by the Party even though their bodies are torn to pieces. They should constantly cultivate abilities for conceiving, organizing, supervising, guiding and developing their work to become versatile workers who are capable of implementing any tasks with credit. They should acquire our Party’s methods of mass work, set personal examples in all undertakings and make tireless efforts for the good of the people. Cherishing deep in their hearts the true meaning of our Party’s affection for the people, they should be infinitely courteous to them and become their faithful servants, always sharing weal and woe with them and working with devotion for them.

3

Comrades,

At present, our historic struggle for national reunification, a long-cherished desire of the nation, has entered a new phase.

We have taken momentous measures in succession to improve inter-Korean relations and ensure peace on the Korean peninsula with a firm resolve to achieve without fail the cause of national reunification, into which the great Comrades Kim Il Sung and Kim Jong Il put their heart and soul all their life.

Last year we held three rounds of historic north-south summit meetings and talks and adopted inter-Korean declarations to bring about a dramatic turn in the relationship. They were events of great significance which turned around the grave situation that was teetering on the brink of war every moment and which heralded the start of a new journey to national reunification.

Now the entire nation ardently hopes that the historic Panmunjom Declaration and the September Pyongyang Joint Declaration will thoroughly be implemented so that the peaceful atmosphere on the Korean peninsula will continue and inter-Korean relations will improve uninterruptedly.

The south Korean conservative forces, however, are responding to the aspirations of the nation and the unanimous expectations of the international community with too perfidious words and behaviours, and are struggling to bring inter-Korean relations back to those in the period before the publication of the Panmunjom Declaration.

The United States openly forces “speed adjustment” on the south Korean authorities and tries in every way to subordinate the implementation of inter-Korean agreements to its anti-DPRK policy marked by sanctions and pressure.

As a result, a grave situation has been created for us to decide whether to ease the tension on the Korean peninsula and continuously carry on the atmosphere of inter-Korean rapprochement or to return to the past when the tension spiralled up towards a catastrophe with the danger of war looming larger.

We cannot look on with folded arms the current situation which causes serious concern over the destiny and future of the nation and peace and security in the region, but we have to take proactive measures without delay to straighten it out in line with the unanimous aspirations of all the fellow countrymen.

To this end, it is needed above all to take a proper stand and attitude with which to invariably adhere to and implement the inter-Korean declarations encapsulating the unanimous will of the nation, whatever difficulties and obstacles in the way.

I would like to make it clear once again that as I already declared, it is my firm determination to turn, together with the south Korean authorities, inter-Korean relations into a lasting and durable relationship of reconciliation and cooperation and write a new history of the nation that achieves peace and co-prosperity as desired by all the countrymen.

In order to untangle the prevailing unsavoury situation, heighten the good atmosphere for improved relations north and south created with much effort and make it bear meaningful fruit of peace and reunification, it is important to put an end to big-power worship marring the spirit of independence and to the policy of dependence on foreign forces encroaching upon the common interests of the nation, and subordinate everything to the improvement of the relations.

I think that if the south Korean authorities truly want improved relations, peace and reunification, they should come back to the original intention they had at the time of the Panmunjom summit and the September Pyongyang summit and fulfil the responsibility they have assumed before the nation through the sincere implementation of the north-south declarations.

They should not waver in their attitude as they see the tide nor pose as a meddlesome “mediator” and “facilitator” as they busy themselves with foreign trips, but be a responsible party that defends the interests of the nation speaking what they have to say squarely with the mind of their own as members of the nation.

It is our consistent assertion that it is imperative to smash the underhand schemes of the hostile anti-reunification and anti-peace forces within and without in order to sustain the atmosphere of improved inter-Korean relations.

It is needed to realize before it is too late that neither progress in inter-Korean relations nor any fruit of peace and prosperity can be expected if the hawkish forces in the south Korean military, who persist in veiled hostility as they resume the military exercises, which were agreed before to be discontinued, jointly with the United States by changing their names, continue to be allowed to make reckless moves, and unless the anachronistic arrogance and hostile policy of the United States, which is creating artificial obstacles in the way of improved relationship as it presents its arbitrary outrageous demand, are eradicated.

All the fellow countrymen in north and south and abroad should, staking the destiny and future of the nation, resolutely check and foil the moves of the United States and south Korean conservative forces that go against the historic current towards improved inter-Korean relations and peaceful reunification.

If they are truly willing to opt for the improvement of north-south relations, peace and reunification, the south Korean authorities should sympathize with our stand and will, keep pace with us and make a courageous decision to show their sincerity by practical action, not by words.

Our Party and the government of our Republic will continue to make sincere and persevering efforts to achieve the sustained development of north-south relations and peaceful reunification of the country, solemnly cherishing the aspirations and desires of the nation in the future, too.

Comrades,

The first-ever DPRK-US summit meeting and talks, which were held in Singapore in June last year under the world’s spotlight, were a momentous occasion that brought the hope of settlement of peace to the Korean peninsula where fire had been exchanged; and the June 12 DPRK-US Joint Statement was a historic declaration announcing to the world that the two countries which had been hostile to each other from one century into the next would write a new history of relationship, and therefore it won full support and approval of the international community aspiring to peace.

The DPRK voluntarily took crucial and significant measures including the discontinuation of nuclear test and test-fire of intercontinental ballistic missile, thereby taking the first step towards confidence-building which is the main key to the removal of bilateral hostile relations, and it also took the broadminded measure of realizing the repatriation of the remains of US soldiers, which had been requested by the US President, as a show of its will to sincerely implement the June 12 DPRK-US Joint Statement which serves as a milestone in the establishment of a new bilateral relationship.

However, the second DPRK-US summit talks held in Hanoi last February raised strong questions about whether the steps we took under our strategic, courageous decision were right, and they were an occasion that gave us a sense of caution about whether the United States is genuinely interested in improving the bilateral relations.

At the talks we expressed our resolve to set the essential stages and course to be followed without fail for the implementation of the June 12 DPRK-US Joint Statement in the interests of both sides and to take more prudent and trustworthy steps, and looked forward to a positive response of the United States.

But the United States came to the negotiating table after thinking only about completely unrealizable methods.

In other words, they were unprepared to solve problems with us at the table and they had no definite orientation or methodology.

By that sort of thinking, the United States will not be able to move us one iota nor get what it wants at all, even if it sits with us a hundred times, a thousand times.

It has recently conducted a test for simulated interception of our intercontinental ballistic missile and resumed military exercises the US President committed himself to suspending, while making other hostile moves contrary to the spirit of the June 12 Joint Statement in a more undisguised way. These seriously get on our nerves.

I am very displeased with such a trend.

As waves rise when wind blows, the more pronounced the US policy hostile towards the DPRK becomes, the tougher our counteraction will become.

Although it strongly hints at the settlement of issues through dialogue as it thinks about the third round of DPRK-US summit talks, the United States still looks away from the withdrawal of its hostile policy, the basic way for establishing a new bilateral relationship; rather it mistakenly believes that if it pressures us to the maximum, it can subdue us.

We, of course, attach importance to the settlement of issues through dialogue and negotiations, but the US-style dialogue of unilaterally pushing its demands does not fit us, nor are we interested in it.

Though the United States calls for a negotiated settlement of issues, it is stirring up hostility to us day after day, which is an act that is as foolish and risky as an attempt to put out fire with oil.

Given the deep-rooted animosity between the DPRK and the United States, in order to implement the June 12 Joint Statement both sides should give up their unilateral terms and seek a constructive solution that meets each other’s interests.

To this end, it is needed above all for the United States to approach us with a new way of calculation after putting aside the current one.

The United States is talking much about holding the third round of bilateral summit talks, but we are neither pleased nor willing to see summit talks like the Hanoi summit talks re-enacted.

However, as President Trump continuously observes, personal relations between he and I are not hostile like the relationship between the two countries, and we still maintain good relations, and if we want, we can send and receive letters asking for each other’s regards any time.

If the United States proposed holding the third round of summit talks after finding out with a proper attitude a methodology that can be shared with us, we would be willing to try one more time.

But in my opinion at this moment, it comes to my mind that there is no need for me to obsess over the summit talks with the United States out of thirst for the lifting of sanctions.

Anyway, we will be patient and wait till the end of this year to see whether the United States makes a courageous decision or not, but it will obviously be hard to get a good opportunity like the last time again.

In future, I will put my signature on an agreement without hesitation only when it contains fair clauses which conform to the interests of both sides and which are acceptable to them, and this depends entirely on the stand the United States takes and the way of calculation it comes up with.

What is obvious is that if it sticks to its current political way of calculation, the prospects for problem solving will be bleak and very dangerous.

At this crucial time, I hope that the United States will make a well-advised judgment and the second hand of the clock of the DPRK-US showdown which they stopped with so much difficulty will not move again for all ages.

The government of the Republic will strengthen and develop the bonds of friendship and cooperation with all the countries of the world that respect the sovereignty of our country and are friendly to it, and will advance hand in hand with all the peace-loving forces of the world to establish a lasting and durable peace mechanism on the Korean peninsula.

Comrades,

As I have just said, I will no longer set my heart on such a trivial issue as lifting sanctions by the hostile forces, but open up the way to prosperity by our own efforts.

Although the goal of our struggle is demanding and challenges and difficulties stand in the way of our socialist construction as ever, our Party and the government of our Republic are steadfast in their will to open a new phase of prosperity and achieve the ideal and goal of building a powerful country by their own efforts under the unfurled banner of Kimilsungism-Kimjongilism.

The road of independence leads to prosperity and victory. Nothing can reverse or stop the dynamic advance of our State and people that have unshakable faith and will to pave their own way by themselves with confidence in their own strength.

Let us all make a general advance to successfully accomplish the cause of building a powerful socialist country, holding higher the banner of the great Kimilsungism-Kimjongilism and firmly rallied behind the Party and the government of the Republic. -0-

Their website is being a little difficult at the moment — will add the Korean version as well when possible.

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South Korean banks preparing for inter-Korean improvements

Wednesday, February 20th, 2019

By Benjamin Katzeff Silberstein

Korea Herald had an interesting article about South Korean banks and Kaesong the other day, not least about the blurred lines between the public and private spheres in South Korea’s financial sector:

Fired up by the thawing peninsular mood built on the latest inter-Korean summit, banks here have buckled down on establishing business in the North in the near future, their initial focus fixed on the resumption of the Kaesong industrial park and Kumgangsan tours.

Steering the move are the state-run banks that strive to win an upper hand in infrastructure financing, as well as Woori Bank and NH NongHyup Bank, which had operated businesses in the joint operations zones in the past.

On Wednesday and the second day of the three-day summit, President Moon Jae-in and North Korean leader Kim Jong-un announced that they will resume inter-Korean projects at Kaesong and Kumgangsan as soon as conditions are met.

Rejoicing at the news was Woori Bank, currently poised to kick off banking operations at any given time in the Kaesong industrial park, according to officials Thursday. The bank had operated in the zone for eight years from 2004, providing deposits, withdrawals, remittances and all other basic banking services to resident companies and workers.

It once withdrew in April 2013, upon Pyongyang’s third nuclear test, but soon resumed business in September that year, until the final termination in February 2016.

Even after Seoul’s government shut down the industrial facilities amid heightening inter-Korean conflicts in 2016, the bank maintained a temporary bank window of the Kaesong office on the basement floor of its headquarters, in the hopes of resuming business in the North Korean region.

This special corner is in charge of the follow-up financial management of the companies that evacuated from the now-deserted industrial zone.

“Woori Bank’s qualification as the bank in charge (at Kaesong) remains valid to this day. It is just the geopolitical situations that have been keeping us off over recent years,” said an official of the bank.

“The resumption of the banking business in Kaesong is for the Unification Ministry to decide, but once the government approves, we are fully ready to take the related computing system and database and start operations.”

Another hopeful is NH NongHyup Bank, which had provided currency exchange, deposit and loan services at Kumgangsan from 2006-2009, when the tourist business was active.

Full article:
Banks ready for inter-Korean economic cooperation
Bae Hyun-jung
Korea Herald
2019-02-20

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Rice for Party membership in North Korea

Monday, January 28th, 2019

Benjamin Katzeff Silberstein

Daily NK:

“A ceremony was held in December to issue the new Party membership cards. Suddenly, the managing secretary ordered all of the new Party members to contribute one ton of rice to the state,” said a Sinuiju, North Pyongan Province-based source.

“I heard about the story right after it happened. One particular man had worked hard to become a Party member and had given bribes to higher-ups to speed up the process. So he was really taken aback by what happened.

“He was granted membership in mid-December thanks to a recommendation from his workplace and attended a ceremony later to receive his membership card. But the managing secretary suddenly told them after the ceremony ended that they had to immediately contribute one ton of rice each, which caused an uproar among the attendees.”

The man ended up borrowing rice from neighbors and friends to meet the quota, but he now faces the difficulty of having to pay back the debt, which according to current market rates amounts to over 500 USD.

“I worked hard with the belief that getting a Party membership card would be the best thing for me, but now I’ve just been saddled with debt,” he said, according to a separate source in North Pyongan Province close to the matter, who noted that “other people are in dire straits because of this.”

“People tell me that becoming a Party member isn’t as much of an honor as it used to be, and that you can survive without a membership card. All you need is money.”

The growing marketization that North Korea is experiencing has led many residents to avoid Party membership. Members are required to attend all Party-related activities and are thus less free to engage in private business activities than non-members. If Party members are caught engaging in such activities, they may be expelled and placed on a surveillance list.

North Koreans with poor “songbun,” or social status, are increasingly offering bribes to join the Party, which has led many North Koreans to believe that membership is not as prestigious as it was in the past.

Full article:
North Korean authorities demand rice from new Party members in North Pyongan Province
Ha Yoon Ah
Daily NK
2019-01-28

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Miners punished for absenteeism

Monday, January 21st, 2019

Benjamin Katzeff Silberstein

Daily NK:

“Around 50 Musan Mine workers who failed to show up for work were recently sentenced to disciplinary labor. Depending on the number of days were missed, the workers received sentences ranging from a month to a maximum of six months,” said a North Hamgyong Province-based source on January 17.

“They now have to cut down trees in the mountains and participate in construction projects. The construction projects are mainly focused on government and apartment buildings in and around Musan.”

Musan Mine has faced a number of difficulties since Kim Jong Un came to power. In mid-2013, the mine was reportedly operating well with authorities promising in September of that year to raise the wages and ration levels of miners as an incentive to increase the flow of iron ore into China. This was seen as achievable if the authorities were going to receive their expected payments from China for the exported products.

Wages for miners were increased 100-fold at the time and miners welcomed the fact that 200,000 KPW of their 300,000 KPW monthly salaries were paid as non-cash items including rice, vegetables, side dishes, daily necessities and even electronic devices.

The situation, however, did not last for long. The authorities were unable to maintain their monthly wages after North Korea’s nuclear and missile tests led to international sanctions and the banning of exports.

According to a separate source in North Hamgyong Province, as they had to earn money to survive, many of the miners chose to pay their way out of working at the mine in order to conduct private business activities at the markets, an arrangement referred to as “8.3 Earnings or 8.3 Money.”

With a legal basis in the country’s “August 3 (8.3) Movement” which calls on enterprises and factories to obtain their own raw materials for production, “8.3 Earnings” permits workers to pay a specified fee each month to their place of employment in exchange for allowing them to skip work and engage in their own private business activities.

Musan Mine, however, is seen as a critical piece of infrastructure to the North Korean state. Located in Asia’s largest iron ore depository, the mine contains an estimated 4.9 billion tons of accessible iron ore underground. Kim Jong Un’s New Year’s Address emphasized the country’s “self-sufficiency” in effect implying that Musan Mine would be a major pillar to achieving that goal.

“The authorities needed to ensure that miners not showing up for work understand who’s in control,” an additional source in North Hamgyong Province reported.

Full article:
Miners handed severe punishment for absenteeism
Lee Sang Yong
Daily NK
2019-01-21

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South Korea gets sanctions exemption for railway survey

Saturday, November 24th, 2018

Benjamin Katzeff Silberstein

Reuters:

South Korea said on Saturday it had received sanctions exemptions from the U.N. Security Council for a joint survey of inter-Korean railways, the first step towards reconnecting rail and road links cut during the 1950-53 Korean War.

In April, the leaders of the two Koreas agreed to adopt practical steps to reconnect railways and roads as part of efforts to improve bilateral relationships.

“The sanctions exemption has big implications given that the project has garnered recognition and support from the United States and the international society,” South Korea’s presidential spokesperson Kim Eui-kyeom said.

He expressed hope of quick construction of the railways, which he said will take inter-Korean cooperation to a new level.

South Korea requested an exemption for deliveries of fuel and other equipment needed to conduct the railway survey in the North, Yonhap News Agency said.

Pyongyang is under wide-ranging U.N. sanctions for its nuclear weapons and ballistic missile programs.

In October, the two Koreas agreed to carry out joint field studies on transport plans, with a ground-breaking ceremony in late November and early December.

But the plan was delayed amid stalled talks between Washington and Pyongyang following an unprecedented summit in June at which the two sides agreed to work toward nuclearization and peace on the Korean peninsula.

Full article:
South Korea secures U.N. sanctions exemption for inter-Korean railway survey
Hyunjoo Jin
Reuters
2018-11-24

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Hyundai’s aspiration to reverse N Korea fortunes

Wednesday, October 31st, 2018

Benjamin Katzeff Silberstein

Reuters:

South Korean President Moon Jae-in, who has pushed for rapprochement with the North since his election last year, calls the Kaesong industrial park a “lifeline” for South Korea.

Asia’s fourth-biggest economy is being squeezed globally between high-end, innovative manufacturers and low-cost producers in China and elsewhere.

Before the 2016 closure of Kaesong, some 120 South Korean companies employed 55,000 North Korean workers there, making everything from clothes and kitchen utensils to electronic components. The North Korean workers were well qualified, hard working and cost just a fraction of what workers in the South were paid, factory owners said.

Almost all small and medium enterprises which used to operate in Kaesong said they would like to go back, according to an April survey.

Seven out of 10 South Korean companies would prefer to use North Korean workers instead of foreign migrants due to language barriers and high costs associated with hiring foreign labor, a separate survey by the Korea Federation of SMEs found.

Hyundai Asan has the most riding on the prospect of a peaceful peninsula.

It paid $1.2 billion to buy exclusive rights for Kaesong and Mount Kumgang, and has interests in railroads and infrastructure projects including reconnecting inter-Korean railways.

Hyundai Asan’s rights to land the size of Manhattan in Kaesong last for 50 years, and it has a plan to build an even bigger factory town if the complex reopens, accommodating 2,000 companies and 350,000 North Korean workers.

Less than 5 percent of the total property in Kaesong has been developed currently, Hyundai told Reuters.

Officials say Hyundai has also agreed with the North to run tours in the coastal city of Wonsan, which North Korean leader Kim Jong Un is trying to build into a hotspot for tourism and foreign investment, as well as Mount Paektu, the famed homeland of both Koreas.

Hyundai’s Baek said the company is also in talks with Seoul and state-run corporations about projects to reconnect railroads between the North and South.

“The government respects Hyundai’s business rights it signed with the North,” said a spokeswoman at South Korea’s Unification Ministry, who did not respond to a question about its discussions with Hyundai.

NO LOVE FROM WASHINGTON

South Korean government officials and business executives say the biggest hurdle is opposition from Washington, which wants to maintain sanctions until Pyongyang completely denuclearizes.

In July, Mark Lambert, director for Korean affairs at the U.S. State Department, called about 10 South Korean businessmen for a meeting at the U.S. embassy in Seoul to deliver a stern message: No resumption of any businesses until denuclearization.

“The mood in the room was bleak,” said SJTech Chairman Yoo Chang-geun, who used to operate a factory at Kaesong and attended the meeting.

Baek, who was also present, unsuccessfully argued Kaesong and Mount Kumgang should be waived from sanctions “to show our goodwill to North Korea.”

A spokeswoman for the U.S. State Department declined to comment on details of “private diplomatic conversations.”

Article source:
After tragic losses, Hyundai aims to reverse N. Korea fortunes
Reuters
2018-10-31

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Two Koreas start railway inspections

Sunday, October 21st, 2018

Benjamin Katzeff Silberstein

South and North Korea are likely to start their joint on-site inspection as early as this week for a project to modernize and re-link railways across their border, government officials said Sunday.

At high-level talks last week, the two Koreas agreed to begin field surveys of the western Gyeongui railway in late October and the Donghae railway along their east coast in November.

“The Koreas are known to be discussing ways to conduct the inspection (on the North section) of the Gyeongui line starting late this week,” a government official said.

“The schedule is flexible, depending on consultations between the government and the United Nations Command (UNC) over the passage of the Military Demarcation Line,” he added.

In August, the Koreas failed to carry out a joint railway field survey as the U.S.-led UNC did not approve the plan, citing “procedural” problems, a move widely seen as U.S. objection to the inter-Korean railway project on the basis that it might hamper sanctions.

“As far as I’m concerned, Seoul’s consultations with Pyongyang as well as the UNC are smoothly under way,” the official said.

If launched, the joint inspection will involve the test operation of a train on the railway linking Seoul to the North’s northwestern city of Sinuiju.

After that, the Koreas will check the eastern railway on the North’s side that connects Mout Kumgang to its northeastern North Hamgyong province.

South and North Korea are looking to hold a ground-breaking ceremony for work on the rail and road systems along the eastern and western regions either in late November or early December.

Meanwhile, the two Koreas plan to hold working-level talks starting this week to implement agreements of the inter-Korean summit held in Pyongyang last month.

Full article/source:
Koreas to start joint inspection of western railway as early as this week
Yonhap News
2018-10-21

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Explaining North Korea’s exchange rate stability: it’s all about the companies

Thursday, September 13th, 2018

By Benjamin Katzeff Silberstein and Peter Ward 

The stability of the market exchange rate for won-to-US dollars has been one of the most puzzling features of the economy over the past few years, and particularly so during the so-called period of “maximum pressure” and heavy sanctions by the international community. The market exchange has not once moved out of its ordinary – also remarkably stabile – territory over the past few years, as the following graph shows with clarity:

Won for USD-rates on the markets, 2009–September 2018. Data source: Daily NK. Graph: NK Econ Watch.

Thus far, to my knowledge, there have been two main, potential explanations:

(1) Maximum pressure is not having a meaningful impact on the North Korean economy as a whole. Even though it can’t export coal, minerals or textiles under current sanctions, its main sources for foreign currency revenue, the sanctions aren’t being enforced strictly enough to impact the economy as a whole, and foreign currency keeps flowing into the economy.

This explanation is pretty easy to dismiss offhand, since we know with more or less certainty that North Korea’s exports of these goods have plunged as Chinese sanctions enforcement has been fairly strict since the late summer/early fall of last year, even though it’s waxed and waned as it always does.

(2) The second explanation, most notably put forward by Bill Brown, is that Pyongyang is much better at monetary policy management than they’re given credit for. Chiefly (but not solely) through decreasing the amount of won in circulation, by giving state-owned enterprises (SOEs) smaller loans and credits in won, the government is able to keep the exchange rate stabile.

Speaking with my friend and colleague Peter Ward, a researcher of North Korean economic policy under Kim Jong-un and avid reader of North Korean economics journals, he explained a third possibility, partially in line with the latter hypothesis posed above. Ward visited North Korea twice in the past year, and was able to confirm many of the economic policy developments he had first detected in the literature from Pyongyang.

In short, Ward’s explanation is as follows: the main holders and users of foreign exchange in North Korea are not individual citizens, but state-owned enterprises, which legally (since 2013) use foreign exchange in transactions amongst themselves. The quantities of foreign exchange held by SOEs make them, and not the foreign currency markets that individual citizens access and use, the main determinant of the market exchange rate for foreign currency. Therefore, most of the foreign currency in circulation has been there for several years, not entering or exiting monetary circulation.

I asked Ward to share some of his thoughts with the readers of North Korean Economy Watch. Below is a brief Q&A of sorts.

Benjamin Katzeff Silberstein (BKS): first, when did this practice of SOEs trading in foreign currency become common and legally permissive?

Peter Ward (PW): probably around early 2013. This is when the “policy to make domestic production and exports one” came into force. The idea is to align domestic input prices for manufacturing, and consumer goods prices, with prevailing prices on international markets. This is literally what North Korean economics literature says that they aim to do, despite ostensibly being a socialist system in theory.

BKS: How is the FX-market price in North Korea determined? And where do the FX-market for SOEs and that for private citizens intersect?

PW: We don’t know, but one could imagine that there are major foreign exchange markets in North Korea – regional markets, both markets on the ground, so to speak, and between enterprises within regions. How does the center know the prevailing price? The regional price department of the regional People’s Committee price office and market management office (they may either be separate or the same) probably simply calls the local People’s Committee, who supposedly gathers this information from the local market management offices. At any rate, there’s reporting of the prevailing local exchange rate throughout the system.

Major enterprises will also know how much their inputs costs in foreign exchange, and a sense of how much their products would sell for on the world market. In that way, they’re able to assess the costs of their inputs in the world market (or at least China), and know how much they need to charge to make a profit or break even.

The market for individual citizens and SOEs intersect at several levels. SOEs likely source much of their inputs from wholesale markets, and from domestic private traders. They also obtain some of their foreign exchange from loans from private individuals. Private citizens can legally lend money to SOEs, but investments in SOEs by private citizens also happen, though they’re technically not legal, and both these investments and loans probably happen quite often in foreign exchange.

So the market price equilibrium happens through all these conduits, and as on any market, it is determined by countless instances of bargaining between traders, SOEs, and to a proportionally smaller extent, private citizens.

BKS: so where is the FX coming from, to begin with?

PW: if most inter-enterprise contracts and transactions are denominated in foreign currency, they’d be insulated from any sudden, exogenous trade shocks, such as sanctions. They’re still trading amongst themselves with whatever FX-holdings they have. For all intents and purposes, foreign currency inside North Korea is the principal legal tender – that’s what’s likely used for all major transactions inside the country, so exogenous shocks such as sanctions, from the outside, don’t necessarily impact the market price for foreign currency inside the country.

BKS: Is it likely, in your view and judging from your observations in North Korea, that the government maintains a price ceiling on the market exchange rate?

PW: Yes, it is. The government maintains price ceilings on a range of commodities, at least that’s what people inside the country say. They probably have an informal peg to the RMB, since China is their principal trade partner. It looks like it, but we don’t know for sure if they do. One possibility is that have significant cash reserves of RMB…

BKS: is it possible that China is simply helping North Korea keep the won stabile, by simply funneling RMB in?

PW: that’s certainly a possibility. The North Korean government keep a very close eye on the exchange rate, both in terms of physical cash in circulation and deposits in bank accounts, which SOEs have – both domestic and foreign currency bank accounts. They’ll keep a tight control over domestic currency-denominated loans to SOEs – that’s certainly one way of doing it. State banks will probably be encouraged to denominate such loans in foreign currency.

The government can also keep a pretty tight rope around money in circulation, since enterprises now have their own individual accounting system. The central government isn’t constantly borrowing money from the central bank to pump into SOEs, so the amount of money created by the central bank to lend to SOEs has gone down a lot.

That, at least partially, explains how the government manages to keep domestic currency circulation down. It doesn’t look like they’re printing much money overall, I saw bills from the pre-2009 currency re-denomination being used as late as July this year. And the highest denomination of North Korean won in circulation is the 5,000 won note, which has a market value of around 60 US cents, hardly appropriate for anything more groceries.

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North Koreans are getting paid deposits on banking, scholar says

Wednesday, September 12th, 2018

By Benjamin Katzeff Silberstein

Daily NK recently reported on a conference in Seoul, where one scholar working on the North Korean economic system, Jung Eun Lee, said that there’s at least anecdotal evidence to suggest that some North Koreans, who have (bravely) chosen to deposit money in regular banks, are actually getting paid interest on their deposits:

Another researcher at the press conference stated that system-wide, market-friendly reforms have occurred in the financial sector following Kim’s rise to power. North Korea under Kim Jong Un has been implementing a policy where “idle currency” is absorbed into the official economy. The policy is significant because it shows that the state is partially adopting capitalist practices.

“The North Korean authorities are emphasizing bank credit and releasing articles saying that ‘banks do not ask about the state of [customers’] ownership or the source of their deposit balance,” said Jung Eun Lee, another research fellow at KINU. “There are more and more North Koreans who say they have received both the principal and interest from their money deposited in North Korean banks.”

“What is more interesting is that the North Korea’s Central Bank launched a domestic electronic payment card called the Jongsong Card in 2015, and the number of stores accepting the card is increasing […] The use of electronic payment cards is increasing in Pyongyang and their use is expanding because [consumers] benefit by being able to prevent exposure of their identities, and are not burdened by the need to accept change during their financial transactions,” Jung concluded.

Full article:
Increasing autonomy for North Korean enterprises
Ha Yoon Ah
Daily NK
2018-09-10

There is likely much more happening under the surface in North Korean financial development than what reaches the audience in South Korea in the rest of the world. (See, for example, Peter Ward’s recent twitter-thread on financing of state-owned enterprise operations). If this assessment is true – that North Koreans have, in sizable numbers, been receiving interest on their deposits, it’s pretty significant. I’m not fully sure it’s a new development, but given the backdrop of the past few years – not least the currency revaluation in 2009 – it would mean that the official banking system has been able to gain some hard-earned trust back from at least a portion of citizens.

Now, it’s entirely possible that people are primarily depositing money for other reasons than savings. For example, with the payment cards that have popped up in recent years, people by definition have to deposit their cash with state-owned banks to use these cards, which many may do simply out of convenience. And then, the deposits earn interest as a nice side-effect. It’s certainly notable if more North Koreans trust that state-owned banks won’t confiscate the hard-earned cash that they choose to deposit, but it might not be a revolutionary development.

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North Korean state security agents fine Chinese visitors for making phone calls abroad

Thursday, August 9th, 2018

Benjamin Katzeff Silberstein

Daily NK:

North Korean Ministry of State Security (MSS) agents have been ramping up the issuance of monetary fines for Chinese business people and drivers in the country for various infractions.

“Chinese business people and truck drivers are being fined for taking calls from China while they are in North Korea,” a source in China close to North Korean affairs told Daily NK on August 7. “A surveillance agent stationed near the Wonjong Border Customs Office is stopping vehicles driven by Chinese business people and truckers who are detected receiving calls and issuing them with fines.”

“Chinese tourists have their phones confiscated by travel agencies so they cannot make calls, but business people and truck drivers are under no such restrictions and could previously receive calls from China without issue,” he continued, adding that international calls to China are permitted within a radius of one kilometer of the customs office.

Chinese nationals affected are responding with incredulity at the 1,000 yuan fines for taking calls from China but “they are forced to pay the fine, however, because they depend on good relations with the North Korean authorities to conduct cross-border business.”

MSS agents have long forced North Koreans to pay bribes in exchange for letting them off the hook for making international calls. But these agents are now more pressed than ever to find ways to earn money and it appears that Chinese nationals are now in their crosshairs.

The North Korean government keeps a watchful eye over the activities of its agents, but corruption has such deep roots within the MSS that agents have no qualms with taking advantage of Chinese nationals.

One of the driving forces behind the push to earn more money is the nationwide requirement to pay “loyalty funds,” which is aimed at supporting development of the Wonsan-Kalma marine tourist zone and the Samjiyon area.

On top of their surveillance of cellphone users, MSS agents are also fining Chinese vehicles that carry North Korean passengers.

‘There are cases where Chinese truck drivers take on North Korean passengers to make a little extra cash, but MSS agents are cracking down on this activity and fining the drivers 500 KPW for each male passenger and 1,000 KPW for each female passenger. Chinese drivers are now increasingly ignoring hitchhikers on the road,” a source in North Hamgyong Province added.

“The fines are causing Chinese business people to be more watchful of their activities in North Korea. Some are even questioning whether they should even be doing business in the country.”

Article source:
MSS agents fine Chinese nationals for infractions to earn money
Mun Dong-hui
Daily NK
2018-08-09

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