Archive for the ‘Chamber of Commerce Law (Order 946)’ Category

Park’s Appearance Unlikely to Mean Real Reform

Monday, December 13th, 2010

According to the Daily NK:

An oft-cited example of an advocate of reform within the North Korean leadership, former Prime Minister Park Bong Ju [aka Pak Pong-ju] appeared alongside Kim Jong Il during a recent onsite inspection at a Pyongyang sock factory, leading to suggestions that North Korea may again be contemplating the idea of embracing economic reform.

However, this is less likely than another explanation; that Park was brought back into the fold to oversee a number of revisions to the legal code during 2010.

Park, whose appearance at the onsite inspection was verified in five images broadcast by Chosun Central Television on the 11th, was a leading architect of the July 1st Economic Management Reform Measure of 2002, which formalized a number of relatively liberal economic policies.

He then became Prime Minister in September 2003, but was deposed during a period of economic retrenchment in April 2007, sent into virtual exile in South Pyongan Province as manager of Suncheon Vinalon Complex.

As a result of this career path, Park is seen by many as a reformist thinker in the North Korean elite.

Therefore, when he stepped back onto the main political stage this August, three years and four months later, mentioned in a report published by Chosun Central News Agency on August 21st about the 50th anniversary of a well-known Pyongyang restaurant, Okryugwan, it led to suggestions that North Korea might be set to head down the road to economic reform, led by Park as Party First Vice Director.

However, Park’s re-emergence does not mean that North Korea is about to turn towards market mechanisms on an official basis; conversely, it is more likely to be related to the revision this year of a number of laws which were actually designed to strengthen the control and supervisory functions of state institutions.

North Korea officially revised the People’s Economic Planning Law on April 6th alongside the Pyongyang Management Law, revised on March 30th, and both its Labor Protection and Chamber of Commerce and Industry Laws, revised on July 8th.

In revealing the legal revisions to The Daily NK in an interview in November, an inside North Korean source commented on the intention behind the changes, saying, “The People’s Economic Planning Law of 2001 alleviated national controls and supervision, even though it came before the July 1st measure of 2002. However, the revised bill strengthens national controls.”

Additionally, the source went on, “This series of bills including the revised People’s Economic Planning Law are the basis of the nation’s control, management and supervision. It should be understood as being part of the same flow as the series of measures undertaken during the succession process since October of 2007, when market controls began wholeheartedly; the 150-day Battle, 100-day Battle and currency redenomination.”

Accordingly, research suggests that North Korea probably chose to play the Park Bong Ju card now to revise state policy to try and sort out the problems left behind by the failure of the 2009 currency redenomination and to address the pressing need to improve the state of the domestic economy, whilst also hoping that the appointment of an official with a reformist image might attract investment from Northeast China and further afield.

Michael Madden has written a bio of Pak Pong-ju. Read it here.

Read the full Daily NK sotry below:
Park’s Appearance Unlikely to Mean Real Reform
Daily NK
Kim So-yeol


DPRK strengthens control mechanisms with revised law on the people’s economy

Friday, November 26th, 2010

Institute for Far Eastern Studies (IFES)

NK Brief No. 10-11-26-1

North Korea has recently revised its law governing the planning of the People’s Economy, significantly strengthening the state’s ability to oversee and control economic activities throughout the country. The South Korean Ministry of Unification recently released the contents of the law, which the North revised on April 6, as well as details of two laws created by the Supreme People’s Committee Standing Committee on July 8; the Law on Labor Protection (Order 945) and the Chamber of Commerce Law (Order 946).

The new law on economic planning contains seven new articles, but since the details of the August 2009 revision were never made public, it is unclear when the new articles were added. What is clear, however, is how different the new law is when compared to the Law on Planning the People’s Economy that was passed in May, 2001 and the Economic Management Reform Measure enacted on July 1, 2002, both of which significantly boosted the autonomy of business managers and eased government restrictions on economic activity.

With the July 1 Measure, the authority of the National Economic Planning Committee was downgraded, central allocations were graduated based on managerial autonomy and profits, the central rationing system was dismantled, and wages were increased. While the economic planning law of 2001 and the July 1 Measure of 2002 eased restrictions on, and oversight of, the people’s economy, the newly-revised law strengthens state control. The new law appears to not only return but also bolster the central control mechanisms that were eliminated by the 2001 law.

Article 16 of the new law states that the planned economy will be based on prepared figures, while Article 18 states that enterprises, organizations and companies will operate on the principle of ensuring regulated numbers, and Article 24 requires the people’s economic plan, drafted by the Cabinet, State Planning Organization, and regional authorities, to be broken down in detail, by timeframe and indexes, and distributed to enterprises, organizations and companies by the end of October. The planning law passed in 2001 called for economic plans to be drawn up based on production statistics provided from ‘below’ and passed up through chains of command (Article 17), but this has been eliminated from the new law.

With the revision of the law on labor protection, North Korea has added more specific language to Article 12 of the ‘Socialist Labor Law’, which was established in April 1978. Article12 of the Law on Labor Protection states that the protection of laborers’ work is the primary demand of the socialist system, which sees the people as the most precious resource. The law strengthens the role of the state in protecting laborers, and identifies ‘difficult and strenuous’ jobs, including mining, fishing, and earthquake investigation. Workers in these fields are to be given favorable treatment, including the issuance of additional clothing, food and other rations.

In addition, the law covers the installation and maintenance of safety equipment, the issuance of protective gear, and additional protections for female workers. It also restricts work to eight hours per day and guarantees holidays and time off, health care, and protection of property. These and other articles in the law increase state management of workers, but defector testimonies paint a different picture. Most workers save their wages with the assumption that they will have to pay bribes, medical costs and other expenses out-of-pocket.

The law on commercial activity further details the ‘Chamber of Commerce Regulation’ handed down by the Cabinet in 2008. The law covers a range of duties and rights regarding commercial operations, including contracts and operations regarding joint ventures with foreign firms; legal letters of confirmation, certificates of country of origin and other paperwork related to trade issues; as well as exhibitions and conventions held in conjunction with foreign businesses.