North Korean Economy Watch

Institute for Far Eastern Studies (IFES)
NK Brief No.09-12-22-1
12/22/2009

The latest on-site visit by Kim Jong Il, in mid December, marked the 156th inspection of the year. This is an increase of approximately 170 percent over last year. Among those accompanying the ‘Great Leader’, Secretary of the Central Committee of the Korean Workers’ Party Kim Ki-nam was seen most frequently, traveling with Kim Jong Il on 107 different occasions. Others seen frequently with Kim include Jang Sung-taek, brother-in-law and right-hand man, as well as Party Central Committee Vice-chairman Pak Nam-ki.

According to North Korean media officials, Kim Jong Il’s on-site inspections this year include 64 visits to economically important locations, 43 to military installations, 13 to sites related to foreign affairs, and 36 to other sites, for a total of 156 visits. Kim made only 90 visits during 2008.

Last year, 55 percent (50 visits) of Kim Jong Il’s on-site inspections were to military sites, while 26 percent (24 visits) of trips were to sites related to the economy. This year, 41 percent of site visits were to economically-relevant sites, while only 27 percent were to military sites.

These visits are linked to the recent ‘100-day Battle’ and ‘150-day Battle’ to boost domestic production in order to meet North Korea’s goal of being a ‘strong and prosperous nation’ by 2012.

North Korean authorities are undertaking massive construction projects across the country, such as the building the Huicheon Thermoelectric Plant, tens of thousands of new housing units, and other large-scale construction projects.

Broken down monthly, Kim Jong Il has ventured out to on-site visits 10-19 times per month, with the exception of July (8 visits). He has made 8 visits in December up until the 17th.

It is also important to note those who have travelled with Kim. As mentioned previously, Kim Ki-nam was seen 107 times and Jang Sung-taek travelled with Kim 82 times. In addition, Hyon Chol-hae, a former bodyguard of Kim Il Sung and confidant of Kim Jong Il, made 56 visits, General Ri Myong-su was seen with Kim 48 times, and Vice Marshal of the Korean People’s Army Kim Yong Chun was seen on 30 different occasions.

Of particular interest among all of Kim Jong Il’s public appearances this year is that in November he made a visit to the headquarters of the Ministry of People’s Security. Kim also visited the naval complex in Nampo in mid November, and made his first visit to the North’s very first free-trade zone, in Rason, North Hamgyong Province, inspecting the Rasong Dae-heung Trade Fishery Complex. Both of these followed the inter-Korean naval clash in the Yellow Sea on November 10th.

Photo by Eric Lafforgue

North Korean claims record production gains through ‘150-day battle’
Institute for Far Eastern Studies (IFES)
NK Brief No. 09-10-12-1
10/12/2009

It has been boasted that North Korea’s ‘150-day Battle’ to boost the economy (April 20-September 16) resulted in record-breaking jumps in DPRK production numbers, and it has been suggested that that by 2012, some enterprises will “attain production numbers higher than the best numbers recorded at the end of the 1980s.” This claim was made by Ji Young-il, the director of the Chosun University Social Science Research Institute, which is run by the pro-Pyongyang “General Federation of Korean Residents in Japan.”

In “Professor Ji Young-il’s Monthly Economic Review: The 150-day Battle and Prospects for Building an Economically Powerful Nation,” an article in the federation’s newspaper, Choson Sinbo, the author wrote, “There are more than a few enterprises that have set production goals for 2012 at more than three times the current level of production.” He also claimed that some enterprises in the mining, energy and railroad transportation sectors had set goals of as much as 6 times today’s production numbers.

Professor Ji went on to write, “Basically, it is an extraordinary goal ensuring growth of 1.3-1.5 times (a growth rate of 130-150%) per year.” He also explained that surpassing production rates as high as those seen in the late 1980s is one of the fundamental markers on the road toward “opening the door to a Strong and Prosperous Nation.”

Citing North Korea’s “Choson Central Yearbook,” he gave production numbers in various sectors of the DPRK economy at the end of the 1980s: electricity, 55.5 billion kWh (1989); coal, 85 million tons (1989); steel, 7.4 million tons (1987); cement, 13.5 million tons (1989); chemical fertilizer, 5.6 million tons (1989); textiles, 870 million meters (1989); grain, 10 million tons (1987).

Director Ji claimed that during the recent ‘battle’, production in the metals industries was up several times that of the same period in previous years, while energy producers generated several hundred million kWh of electricity, coal production was up 150%, and cement and other construction materials were up 140%. He pointed out that in 14 years of the Chollima movement, beginning in 1957, during which socialist industrialization took place in the North, the yearly average production growth was 19.1%, and he stated that the annual growth of 9 to 10% in industrial production over the past several years was a noteworthy record.

Moving to the agricultural sector, Director Ji also noted that while overseas experts have critiqued this year’s harvest, there has been a definite breakthrough in grain production with land cultivation hitting previously unseen levels over the past several years.

Previous 150-day battle stories below:
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Institute for Far Eastern Studies (IFES)
NK Brief No. 09-24-1
9/24/2009

North Korea’s Supreme People’s Assembly Standing Committee has removed Kim Whan-su from his position as head of public finance, naming Pak Su-kil as the new financial chief and giving him the title Deputy Prime Minister. This news was carried by (North) Korea Central Broadcasting on September 18.

This brings the number of North Korean deputy prime ministers to five, and the inclusion of the prime minister of public finance is meant to further strengthen public finance capacity. This is but one more indication of the importance North Korean authorities have placed on economic reform policies and the establishment of a Strong and Prosperous Nation by 2012. The other four deputy prime ministers are Kwak Bum-ki, Pak Myung-sun, Rho Du-chul, and Oh Su-yong.

This latest reshuffle was ordered through a Standing Committee ordinance. With the approval of the cabinet prime minister and at times when the SPA is not in session, the Standing Committee has the power to appoint cabinet members, department heads, committee chairs and deputy prime ministers.

The head of public finance is responsible for the national budget, but the national budget is limited to the ‘people’s economy’, and does not include the ‘second economy’ run for and by the military. It is the military budget that actually makes up the majority of the nation’s financial dealings. Therefore, despite the naming of the new vice prime minister, it is expected to be difficult to see any substantial change in the implementation of the national budget.

It is not yet known what led to the removal of former financial chief Kim Whan-su. It is possible that his dismissal resulted from poor returns on the nation-wide ‘150-day Battle’, which was brought to a conclusion on September 17. The naming of the new chief and empowering him as a deputy prime minister may be an attempt to squeeze more production out the ‘100-day Battle’ which is expected to commence soon.

The reports on the appointment made no mention of Pak Su-kil’s personal situation, but it is likely that this is the same Pak that has been repeatedly appointed by the SPA as the committee chairman of the North Hamgyong Province People’s Committee. Chairman Pak is known to have risen to the provincial chair position from his former role as chairman of a county administrative economy committee.