North Korean Economy Watch

Institute for Far Eastern Studies (IFES)
2012-1-18

North Korea is continuing to put forward new laws for the special economic zones (SEZs) such as Rajin-Sonbong and Hwangumpyong Island. Recently, North Korea announced special guidelines for the tax investigations of foreign businesses in the zones.

North Korea’s Academy of Social Science Newsletter Volume 4 (published on November 2011) released an article titled, “Suggestions to Improve Tax Investigations in the Special Economic Zone,” which included detailed instructions for the policy improvement for tax investigation for SEZs. Here, particular emphasis was placed on the enhancement of the tax investigation system — to be accurate and rational — for the foreign investment companies.

The article explained, “Based on the principles of equality and reciprocity for the construction of powerful economic state, the tax investigation system in the SEZ must be improved especially at the present time when SEZs are being constructed and expanded to increase economic trade with other nations.”

It also stressed tax officials must be equipped with, “comprehensive knowledge and experience who accurately understand the entire process of business management. They must be capable of creating new tax investigation methods and be able to discern the various forms of tax evasions.”

For the qualifications of the tax officials, the article recommended that the officials be selected based on their knowledge and experience; ability to develop techniques for tax investigation; awareness of rules and regulations of tax laws and bylaws, and regulations of rights and responsibilities of taxpayers; and capability of conducting research on foreign tax investigation policies.

The Academy of Social Science is a government agency of the DPRK, and the recent article on the tax investigation reflects that the government has already begun the process of implementing the tax investigation guidelines and laws in the SEZs.

The article emphasized establishing a tax investigation system acceptable to foreign companies. One can construe this as North Korea’s effort to attract more businesses to the SEZ, which is currently suffering from poor performance.

In addition, North Korea is believed to be placing weight on the tax investigation based on its past experiences with the South Korean companies in the Kaesong Industrial Complex (KIC). In the past, the officials of the Central SpecialDirect General Bureau toured the industrial districts in China and showed keen interests in the tax management.

On December 8, 2011, the KCNA reported that the Standing Committee of the Supreme People’s Assembly (SPA) has adopted the Economic Zone Act for Hwanggumpyong and Wihwa Islands. The law was revised and supplemented to include the Free Economic and Trade Act of Rajin-Sonbong. However, the details of these laws were not disclosed and some experts are predicting that these laws are likely identical to the Chinese laws in China’s flourishing SEZs.

However, on January 11, 2012, Yonhap News Agency of South Korea reported that China rejected the new Special Economic Zone Act of the DPRK because it is “not business-friendly.” The news reported, “China said the law was not business-friendly, telling North Korea that the law had some problemsregarding taxes, accounting, remittance of profits and stability of investment.” It is reported that North Korea is working on the revision of these laws and likely for a new special zone act to be passed by the Standing Committee of the DPRK’s Supreme People’s Assembly (SPA).

Pictured above (Google Earth) is Changsong Town in North Pyongan Province. This town is the home of the Changsong Joint Conference which was held in August 1962.  This meeting was referenced in the DPRK’s most recent Cabinet plenary meeting on the DPRK economy.

According to KCNA (2012-1-22):

An enlarged Cabinet plenary meeting was held.

Present there were Premier Choe Yong Rim and cabinet members.

Attending the meeting as observers were senior officials of the organizations under direct control of the Cabinet, directors of management bureaus, chairpersons of provincial, city and county people’s committees, chairpersons of provincial rural economy committees, chairpersons of provincial planning committees, directors of provincial foodstuff and daily necessities management bureaus and managers of major factories and enterprises.

Prior to the meeting, the participants paid silent tribute to the memory of leader Kim Jong Il.

The meeting reviewed the fulfillment of last year’s national economic plan and discussed how to implement the decision of the Political Bureau of the Central Committee of the Workers’ Party of Korea, joint calls of the WPK Central Committee and the Central Military Commission and the militant task put forward in the joint New Year editorial.

Vice-Premier Ro Tu Chol made a report to be followed by speeches.

The enlarged meeting set it as a priority task for this year to direct efforts into developing light industry and agriculture to improve the people’s livelihood and successfully carrying out the WPK’s prosperity-oriented strategy in the pilot domains and basic industries of the national economy upholding the flames of South Hamgyong Province. It also indicated the tasks and ways for it.

Also discussed was an issue of raising higher the flames of great innovation of South Hamgyong Province in the light industrial and agricultural fields.

The meeting mentioned the need to produce quality consumer goods favored by the people in the field of light industry and effect a decisive turn in development of local industry this year marking the 50th anniversary of the historic Changsong joint conference.

It also stressed the need for ministries and national institutions to help Changsong County in its industrial development.

Also discussed at the meeting were such issues as fulfilling the assignments for grain production for 2012 both in lowland and mountainous areas, making the best use of modern stockbreeding and poultry bases and large fruit and fish farms as well as the tasks for ministries and national institutions to preferentially supply materials, equipment and electricity to farming processes.

The meeting drew attention to the tasks for the industrial fields of electric power, coal, metal, railways and machine and construction and building materials, etc.

The meeting tabled the tasks for all ministries, national institutions and provincial people’s committees to lay their own scientific and technological foundations for stepping up the work for turning the economy into one based on technology in a forward-looking manner as required by the industrial revolution in the new century.

It also discussed the tasks for the fields of education, literature and art, public health, sports, capital construction, land management and urban management.

The meeting stressed the need for all economic officials to preserve the socialist principle and ensure profitability in economic management, operate and manage the economic work on the basis of detailed calculation and science as well as the need for ministries, national institutions and industrial establishments to set up strict order regarding planning, financial dealings and administration.

Relevant decisions were made at the meeting.

As premier of the Cabinet Choe Yong-rim has made quite a few prominent appearances in the DPRK media in the last two years which highlight his official efforts to improve the North Korean economy. His most recent public appearance (January 12) is reported to have been at the Jenam Coal Mine.

Kim Jong-un, however, is not a member of the Cabinet, so he did not attend the meeting. To date his legitimacy is being established through his relationship to Kim Jong-il/Kim Il-sung and as a leader of the KPA—rather than as a leader in the government or even the party (at least so far).

As a result, Kim Jong-un’s guidance visits have consisted almost exclusively of visits to KPA units.  In this month alone, he has visited the 105 Tank Brigade, KPA Unit 169, KPA Unit 3870, KPA Unit 354, KPA Unit 671, and the KPA soldiers constructing the Pyongyang Folk Village on the outskirts of Pyongyang. Uriminzokkiri has also credited him with spearheading the DPRK’s nuclear tests.

UPDATE: Here is Yonhap coverage of the meeting.

“Changsong Joint Conference”
The KCNA article prompted me to look into the “Changsong Joint Conference”, a term that did not ring a bell. The most recent reference I can find to it is this blurb from a March 2011 article in Korea Magazine:

The Changsong Joint Conference of Local Party and Economic Officials was held in August 1962.

The conference marked the beginning of developing the local industry throughout the country.

In recent years the county has made strenuous efforts to carry out the plan of the Workers’ Party of Korea for the building of a thriving nation and achieved many successes.

Hundreds of hectares of forests of raw materials and timber forests including pine-nut, wild-walnut and larch forests have been newly created.

The Changsong Foodstuff Factory gathers in scores of kinds of wild fruits including acorns, wild grapes, fruits of Actinidia arguta and Crataegus pinnatifida every year in mountains.

Recently its officials and workers have modernized all production processes including wild fruit drinks and wines as required in the IT age to produce foodstuffs in time.

Wines made from the fermented juice of wild grapes, fruits of Actinidia arguta and other wild fruits, Crataegus pinnatifida, Rubus crataegifolius, carbonated Actinidia arguta and other fruit juices, dried bracken and sliced bracken and other wild vegetables preserved in soy sauce are in great demand for their peculiar flavour.

The Changsong Textile Mill which started operation with six housewives has been turned into a modern fabric producer. As a treasure mill, it makes a great contribution to the improvement of the people’s standard of living. It produces quality fabrics, woolen knitted goods and quilts and blankets with local raw materials.

The Changsong Paper Mill produces paper from ground pulp. It has streamlined the equipment to improve the qualities of goods.

Looking round the local-industry factories in Changsong County in November last year, Kim Jong Il kindled the flame of developing the local industry throughout the country after the model of Changsong.

Changsong County stands at the head of development of local industry. Now its people work harder to change further the looks of their home village.

Another blogger seems to have located a single page of a book on the Changsong Joint Conference. Fortunately, he typed out the introduction:

The great leader Comrade Kim Il Sung had made a farsighted plan for bridging the gap between town and country and between regions and raising equally the living standards of all the working people. For this Changsong County had been taken as a model.

The great leader who had long pushed preparations for rapid improvement in the livelihood of the mountain peasants, studied deeply the state of affairs in this part of the country, and through his several on-the-spot guidances, paved the shortest cut to establish a socialist paradise.

In August 1962, in order to spread the example of Changsong across the land he convened the historic Changsong Joint Conference of Local Party and Economic Functionaries. There he put forward a new policy and overall ways and means to enhance the role of the county and develop local industry and agriculture, so as to improve radically the people’s living conditions.

In 1974, our people erected in Changsong the historic monument to the on-the-spot guidance of the respected and beloved leader Comrade Kim Il Sung, out of their wish to retell throughout generations the profound care of the fatherly leader who had shown the bright future of mountain villages and transformed that area into a people’s paradise fine to live in.

Kim Jong-il last visited Changsong in November 2010 where he visited the Changsong Foodstuff Factory, Changsong Textile Mill, and Changsong House of Culture. The first two locations are the shining examples of the success of the Changsong Joint Conference.  The Changsong House of Culture is where the meeting was officially held in 1962.

But if the goal of the conference is to reduce the disparity in the DPRK’s living standards, Changsong is probably not the best place to start. Changsong is home to one of the North Korean leadership’s most well-known luxury retreats.  This is because it was was extensively photographed by Kenji Fujimoto while he was working as Kim Jong-il’s personal chef.   See a satellite image and Mr. Fujimoto’s pictures of the compound here. You can see the Taegwan leadership train station Kim used to visit the compound here.

Institute for Far Eastern Studies (IFES)
2012-1-12

The adoption of Act No. 1194 by the Supreme People’s Assembly of the DPRK was recently confirmed. “The Democratic People’s Republic of Korea’s Corporate Law” or the “Corporate Law” was reported to have passed more than a year ago in November 11, 2010.

The “Corporate Law” is evaluated as an important indication of the direction of the economic policy of North Korea since Kim Jong-un was appointed as the next successor at the Third Party Conference held on September 28, 2010.

The law consists of five chapters: 1) Basic Principles of the Corporation; 2) Organization of the Corporation; 3) Management Organization of the Corporation; 4) Business Management Activities of the Corporation; and 5) Projects of the Corporation.

The first article of this act “The Mission of the Corporate Law” states that the law was enacted to, “contribute to the development of the people’s economy and to secure the management system of the socialist corporations by establishing the system and order for the organization and management activities.”

The second article, “The Definition of Corporation” defines a corporation as an “economic unit that operates as an organization that directly handles the labor, facilities, equipment, materials, and finances for the production or volunteer activities.”

Article 9, “The Legal Rights and the Legal Protection Principles,” indicates that the “legal rights and interests of the corporations are protected by the government.” Article 10, however, specifically states that this particular law does not apply to the special trade zones and the foreign investment companies.

Article 18, “The Organization of the Corporation,” has a clause that states “the managing organization has the jurisdiction to close down corporations for unreasonable or lack of prospects that does not meet the standards and the demands of the national policy and reality.”

Article 21 depicts a manager as a “person representing the corporation and responsible for the entire business.” The manager, chief engineer, and assistant manager’s specific responsibilities were also explicated. The hierarchy was clearly indicated where the assistant manager was to report to the chief engineer and the manager while the chief engineer has to report to the manager.

Article 29 affirms that a business is to be managed based on established business and corporate strategies in which every year a draft of the people’s economy plan must be submitted to the appropriate authorities. The written economic plan must be followed on a daily, monthly, quarterly, and by index basis (Article 30).

Articles 31 to 37 include specifics on the improvements of production technology while Articles 38 to 43 include regulations to enhance the management system.

In particular, Article 42 stipulates that the corporation must promote sales based on supply plans and contracts. Those sales that do not follow the plan and the contract cannot be sold.”

Article 44 states, “The appropriate amount of labor is scientifically determined and managed based on the socialist distribution principles and a precise socialist wage system must be implemented.”

In other words, socialist principles will be applied to both the sales of merchandise and wage system. While the corporation will receive autonomy in many areas, clear regulations are provided for sales in addition to evaluation and incentive system for labor.

In recent years, North Korea has continuously passed economic laws for economic construction and enhancing the lives of the North Korean people. Such laws include the following: The Agricultural Law passed on November 3, 2009; Real Estate Management Law on November 11, 2009; the Country of Origin for Export Law on November 25, 2009; and Comprehensive Equipment Import Law on November 11, 2009.

Joseph Bermudez, now a Senior Analyst with DigitalGlobe’s Analysis Center and author of The Armed Forces of North Korea, has posted the latest issue of KPA Journal. You can download the PDF here.

Topics include: M-1979/1989 170mm SPGs (Part 1) and and article on the 12th Supreme People’s Assembly by Michael Madden.

According to Yonhap:

North Korea’s mineral exports to China have tripled this year compared to a year ago, a study showed Sunday.

A joint study of Chinese data by Yonhap News Agency and Seoul-based IBK Economic Research Institute showed that China imported 8.42 million tons of minerals from North Korea from January to September this year, worth US$852 million.

Over the first nine months of last year, China brought in 3.04 million tons of minerals from the North for $245 million.

Most of the minerals were anthracite coals, the data showed. This year, of 8.42 million tons, 8.19 tons were anthracites.

China is the sole major ally and the biggest economic benefactor for North Korea, a reclusive regime under international economic sanctions following its nuclear and long-range missile tests.

Cho Bong-hyun, an analyst at the IBK institute, said North Korea may be trying to earn much-needed hard currency as it aims to become a powerful and prosperous country by 2012.

“Last year, North Korea ordered its institutions to meet their goals in foreign currency income by this year,” Cho said. “Since exporting minerals is a military business, we can see that the military is trying to meet its target. In addition, the steep mineral export growth was attributable to the lifting of the cap on the amount of mineral exports, as ordered by North Korean leader Kim Jong-il.”

China appears to be trying to stockpile mineral resources at affordable prices, Cho added. North Korean anthracites were traded at an average of $101 per ton, whereas the international standard for quality anthracites is $200 per ton.

“Given that North Korean coals are of very good quality, trade with China must have been made at a fairly low price,” Cho said.

Meanwhile, sources said North Korean authorities last month entirely halted its coal exports, as the impoverished country fears a shortage of energy resources during the upcoming winter.

From January to September this year, China exported 732,000 tons of minerals to North Korea, most of them crude oil.

Here is the IBK web page.  If anyone can find a copy of this report and send it to me to post, I would appreciate it.

Additional information:
1. The economics lessons: A. The more isolated the DPRK’s economy from the global trade and financial system, the greater monopsony power Chinese firms can exert on their North Korean trading partners. B. The rents earned in the current DPRK-China trade regime are visible and have organized constituencies.  Unfortunately the much greater gains that could be reaped if the North Korean economy was more open, integrated, and dynamic remain unseen and their potential beneficiaries remain unknown and unorganized.

2. The Nautilus Institute published a very interesting paper by Nathaniel Aden on China DPRK trade back in June. See it here.

3.  Here is the most recent US Geological Survey report on the DPRK’s mineral sector.

Read the Yonhap story here:
N. Korea’s mineral exports to China tripled from last year: study
Yonhap
2011-11-6

Institute for Far Eastern Studies (IFES)
2011-10-5

Dai Yulin, secretary of the Dandong Committee of the Communist Party of China, said in his interview with the China Daily on September 28 that concrete plans for the joint development projects between China and North Korea in the Hwanggumpyong and Rajin-Sonbong regions will be announced at the end of the year.

This past June, Dai stated both countries agreement to jointly develop Hwanggumpyong and Rajin-Sonbong as an economic development zone and reported smooth progress in its plans.

According to Secretary Dai, “The joint management committee between China and North Korea has already been formed to promote the Hamggumpyong development project. Both countries are getting up steam to advance the project.”

In addition Dai explained, “China has secured 10 square kilometers of national land to be used to support the joint development of Hamggumpyong.” He also added, “A think tank comprised of 72 experts was also established to advise and buttress the project.”

When DPRK Cabinet Premier Choe Yong Rim visited China last month, Dai commented, “Choe’s visit to China is underlined with North Korea’s strong interest in economic reform. All the high level officials in the economic sectors accompanied him on the trip.”

While visiting China for five days, Choe met with Premier Wen Jiabao and expressed strong motivation for strengthening trade and cooperation with China, especially to improve its infrastructure. He stated, “For those Chinese companies investing in North Korea, we will provide special accommodations to encourage more investments.” In response, Wen Jiabao commented, “China will do all it can to support North Korea, so that they may seek development method most appropriate for them.”

After the meeting between the two top officials, the two nations came to an agreement to cooperate in trade, investment, and infrastructure, resources and agriculture development.

Prior to meeting with Wen, Choe visited Lanxing Chemical Industrial Machine Co. After he paid his courtesy visit to President Hu Jintao of China in Beijing, he continued to make economic related visits to Baoshan Steel Group, Bailian Xijiao Goods Purchasing Center, and industrial facilities in Jiangsu Province.

After North Korea designated Hwanggumpyong Island as a free trade zone, China has signed a 50 year-lease agreement to develop the island. Despite being a “joint development” in name, in actuality, China has the exclusive development rights based on Chinese capital.

However, North Korea is requesting for revision of the name to “co-development between China and the DPRK,” a request that China is expressing some uneasiness over. The initial agreement was to “lease Hwanggumpyong Islands to China,” which gave exclusive and autonomous development and management rights to China in the zone.

China has articulated on many occasions the Hwanggumpyong project must be strictly based on market principles and expressed apprehension that Chinese businesses may be unwilling to invest in the area if North Korea continues to pursue to change it as a joint development.

Institute for Far Eastern Studies (IFES)
2011-7-13

Kim Jong Il’s field guidance visitations decreased significantly in recent weeks. In place of the North Korean leader, Premier Choe Yong-rim is known to be making solo economic inspection visitations.

According to South Korea’s Ministry of Unification, Premier Choe has made a total of 17 on-site inspections from February. Starting with Huichon Power Plant, four trips in March, two in April, six in May, and lastly, four visits in June were recorded. A high-level official to make on-site inspections unaccompanied by its leader is an unprecedented case. This suggests major change for North Korea in which the chief of Cabinet is now directly heading the economy.

Although these inspections were short day trips, sites visited concentrated mainly on factories, power plants, cooperative farms, and construction sites. While making inspection rounds, Choe’s main duty is to deliver the orders of Kim Jong Il, but he was also witnessed actively suggesting measures to resolve problems that were raised at the sites.

Premier Choe’s economic inspections correspond with the DPRK’s plan of building a strong and prosperous nation by 2012 and an effort to propagate the spirit of self-sufficiency and encourage Juche or self-reliance of the economy throughout the country.

The last report of Kim Jong Il’s official field guidance was on June 3, at the Kosan Fruit Farm located in the Kosan City of Gangwon Province. For more than a month, Kim Jong Il allegedly has not provided any onsite inspections.

There are numerous speculations on the cause of the reduced inspections but many are linking it to Premier Choe.

Many news outlets in North Korea have begun to report on Premier Choe’s economic inspection visits in isolation from Kim Jong Il and related news are on the rise. The details include visits to Kim Chaek Iron and Steel Complex, Nanam Coal Machine Mining Complex, and Chongjin Steel Mill from June 23 to 25 and Chollima Steel Complex on June 29.

On July 2, KCNA covered the news about Choe’s visits to Bukchang Thermalelectric Power Plant. There he presided over meetings discussing the issues of securing raw and building materials to improve facility and technological management as well as specific plans to increase energy production.

Choe’s frequent visits are interpreted to demonstrate the rise in power of the Cabinet compared to its relatively weak position of the past, compared to the Workers’ Party of Korea and National Defence Commission.

Others construe the developments as an effort to weaken any internal dissatisfaction or negative sentiments towards the regime by emphasizing the premier’s active involvement with the economic development to achieve the national goal of becoming powerful socialist state by 2012.

The decline in field inspections by Kim has raised suspicion about the health of North Korean leader. Some suggest that Kim is taking time off to recuperate from the tight schedule of his recent China visit in late May.

Recently, Japanese Kyodo News reported that Kim Jong Il cancelled plans to visit Russia on June 29 for health reasons.

Some speculate Kim is behind the scenes contemplating the changing foreign policies, deterioration of North-South relations, and food shortages.

I am not sure where the Ministry of Unification is getting their numbers. I just did a tabulation of Kim Jong-il’s and Choe Yong-rim’s economic guidance trips and public appearances from February 2011 — July 13 and get very different results than they are announcing: 36 visits for Kim Jong-il and 47 for Mr. Choe.  All the data, including links to the KCNA sources are here in an Excel Spreadsheet.

Also worth mentioning is that between June 3 and July 13 (contrary to the report) Kim Jong-il made 11 or 12 public appearances–four of which were guidance trips. See them here in an Excel Spreadsheet with links to the KCNA source.

Pictured above (Google Maps): No. 91 Office

According to the Daily NK:

No. 91 Office, as it is known, is allegedly run under the auspices of the General Bureau of Reconnaissance.

A defector with substantial experience of conditions there offered information on the situation as far back as 2006 at the NKnet-organized “2011 North Korean Cyber Terror Seminar.”

The defector was unable to attend the seminar in person due to fears for his safety, but via pre-produced materials he explained how No. 91 Office is located in a set of two two-storey buildings in the Dangsang-dong of Mankyungdae-district, and how he entered the buildings on a number of occasions thanks to his relations with traders and cadres affiliated to it.

Additionally, satellite images were used to show the location of the office, just 300m from Ansan Bridge across the Botong River.

The defector also detailed the staff of No. 91 Office; the head, in 2006 a PhD-holding colonel in his 40s, a Party secretary ranked lieutenant-colonel, a similarly-ranked National Security Agency agent and around 80 staff, all in their 20s and 30s.

The 80 staff, all excellent minds selected from Kim Il Sung University, Chosun Computer University, Kim Chaek University of Technology and other elite schools, often spoke of ‘business trips’ to Shenyang and Dandong in China, the source explained.

The No. 91 Office-affiliated trade arm had five workers at the time, and is known as the ‘May 18th Trading Company, he added. Through it, the No. 91 Office allegedly obtains the equipment to do its work and provides hackers and other staff with daily necessities.

The unit has a 35-seater bus and two cars with number plates starting with ‘33’ or ‘34’, officially denoting vehicles belonging to the Mining Industry Department of the Cabinet.

Here and here are previous post on the Reconnaissance Bureau.

Here is a post on similar cyber warfare units in the DPRK: Mirim College and Moranbong University

Read the full story here:
No. 91 ‘Hackers HQ’ Revealed
Daily NK
Kim So Yeol
2011-6-1

The Choson Ilbo reports:

North Korea’s Workers Party has started a generational shakeup in the Supreme People’s Assembly by appointing large numbers of young delegates in their 20s and 30s. The rubber-stamp parliament consists of delegates with a five-year term from various organizations including the party and the military.

A North Korean source said the Workers Party recently ordered municipal, provincial, and county party committees to force elderly members to quit for health reasons and fill the vacancies with people under 40.

“The North Korean leadership is seeking to replace a larger number of elderly members with younger people next year,” which it has declared as the year when the country becomes a “powerful and prosperous” nation, the source said. The regime “also ordered officials to lower the educational level of the delegates, but raise the ratio of female delegates to more than 30 percent.”

The average age of the 687 SPA delegates is 57. Those with college or higher degrees account for 92.8 percent, and women for 19.3 percent, according to the source. The moves are believed to be part of the regime’s efforts to consolidate the succession of leader Kim Jong-il’s third son and heir Jong-un, who is in his late 20s.

Liberty Forward Party lawmaker Park Sun-young backed the story. “I was told by a North Korean source based in a Southeast Asian country that the regime has recently issued instructions for a generational change in the SPA,” she said. “The party is trying to strengthen Kim Jong-un’s control” at a time when the lower echelons of the party, which has a membership of 4.5 million nationwide, have become unreliable since a botched currency reform in late 2008.

“Once the SPA has more delegates in their 20s and 30s who are Kim Jong-un’s loyal cadres, the regime will probably get tough, including launching more provocations against the South,” Park added.

The 12th Supreme People’s Assembly just held their 4th session.

Read the full story here:
N.Korea Pushes Generational Change in Parliament
Choson Ilbo
2011-5-20

International Federation of the Red Cross
Democratic People’s Republic of Korea MAAKP002
30 April 2011

Download PDF here.

The IFRC supports the DPRK Red Cross in four areas: health and care, water and sanitation, disaster management, and organizational development. The provision of essential drugs to 2,030 clinics nationwide remains the largest component of Federation support. At the same time, the health and care programme has successfully piloted the community-based health and first aid (CBHFA) programme in two counties. Within the water and sanitation programme, the ongoing construction of 19 water and sanitation systems will bring the total number of people supplied with clean drinking water in the past ten years to over 600,000.

Western Aid: The Missing Link for North Korea’s Economic Revival?
AEI Working Paper
Nicholas Eberstadt

Download PDF here.

[T]his past January, for the first time in over two decades, Pyongyang has formally unveiled a new multi-year economic plan: a 10-year “strategy plan for economic development” under a newly formed State General Bureau for Economic Development. The new economic plan is intended not only to meet the DPRK’s longstanding objective of becoming a “powerful and prosperous country” [Kangsong Taeguk] by 2012 (the 100th anniversary of the birth of Kim Il Sung), but also to promote North Korea to the ranks of the “advanced countries in 2020.”

Details on the new 10-year economic plan are as yet sketchy. South Korean analysts report that the plan envisions massive amounts of new investment in North Korea: up to $100 billion, by some accounts.3 But even if the investment target is more modest than such rumors suggest, North Korea will be counting on more than just domestic capital accumulation to secure this funding. It will have to rely upon major inflows of both foreign private capital–and foreign aid.

*Both reports have been added to the DPRK Economic Statistics Page.