North Korean Economy Watch

North Korean defector poetry: I am personally not a big fan of poetry, but some poetry written by North Korean defectors has been translated into English and published.  Read it in Radio Free Asia.

North Korean Leadership Compounds: We have pretty much located all of the “easy to find” leadership complexes in North Korea on Google Earth.  However, not all of them are visible with high resolution imagery.  Here are a few I have recently taken care of:

1. Sinchon Compound (written about by Keji Fujimoto)

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Download Google Earth overlay here.

2. Island getaway: For the leader who has everything

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Download Google Earth overlay here.

3. Sugnam

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Download Google Earth Overlay here

Eight Scenic Views of the Songun Era:

1. Sunrise over Mt. Paektu. (See here)

2. Snow Covered Tapak Sol guard post in Mangyongdae.  (See here - Actually not sure where the guard post is, but this is Mangyongdae)

3. Royal Azaleas on the Chol Pass. (See here)

4. Illuinated night view of the Jangja River in Kanggye. (See here)

5. Ulim Waterfall. (See here)

6. Rezoned Handre (Handure) Plain. (See here)

7.  Potato flowers in Taehongdan. (See here)

8. Poman-ri fish farm. (See here)

A Song was even written about these places.

Institute for Far Eastern Studies (IFES)
NK Brief No. 08-12-8-1
12/8/2008

The North Korean online magazine ‘Our Nation (uri minjokkiri)’ emphasized on January 1 that development of national defense industries would be prioritized, stating that it was “the best way to move forward and harden a strong national defense while at the same time developing the entire economy.”

In an article titled, “The Path to Economic Construction of the Military-first Era,” the website reminded the reader of the goal of building a strong and prosperous nation by 2012, and stated that Kim Jong Il had said that building up the economy was the “main line of construction for the building of a Strong and Prosperous Nation.” It went on, “Today’s era is the era in which the national economic strength is determined by the amount of development of the national defense industries,” and, “National defense industries are in a leading position, while the independent establishment of the core economic structure is necessary, and a strong economic base can be constructed.”

The magazine emphasized, “The might of heavy industry can be further strengthened following the completion of the basis of the national defense industries, also ceaselessly developing light industry and agriculture.” The article also stressed that as North Korea’s national defense industries are at a comparatively high level internationally, matching that of the United States, and that he national economy overwhelming potential is easy to see.

The article noted that today’s military competition between nations is practically scientific and technological competition, and, “strengthening of national defense in every way based on science and technology, and establishing a framework of science and technology and deciding to quickly develop a strong and prosperous nation by focusing on science is really the path for building the economy in the Military-first Era.”

The magazine emphasized that this military-first era economic building plan was “truly for the people, and was the most civic path to prepare national economic strength for public services.” “In accordance with changes in the political atmosphere and actual conditions, the amount of energy applied to building of national defense and economic construction, citizens’ livelihoods, or other realms could vary, but the true requirement of the building of the socialist economy is to ceaselessly raise the level of the livelihoods of the people, and ultimately, this goal can never waver.”

Institute for Far Eastern Studies (IFES)
NK Brief No. 08-3-27-1
3/27/2008

The latest issue of the North Korean publication “Economic Research” (2008, issue no. 1) highlights the need to restructure North Korea’s trade system in order to meet the demands of the capitalist market. The journal quotes Kim Jong Il as saying, “[We] need fresh improvement, in our own manner, of the basic Socialist economy’s trade system of yesterday, meeting the current demands being faced due to the capitalist market.”

Therefore, the journal stresses, “As the socialist market crumbles, and given the demands of the capitalist market as [our] focus shifts to overseas economic relations, what is currently needed for the development of overseas trade is improvement of our own style to the trade system that can ensure large profits.

The journal goes on to recommend that, in order to meet these new demands of the international capitalist market, “the most important thing is improving the import-export system based on the foundation of an self-reliant national economy.” It states that raw materials should not be sold as-is, but rather should be turned into processed goods and then sold, that goods popular on the international market should be manufactured for export, and that niches should be chosen in which North Korean goods can dominate the international market.

However, the journal also says, “If individual offices trade with capitalists outside the scope of government controls, ‘reform’ and ‘opening’ sought by the imperialists would occur, and the nation’s economy could liberalize and capitalize…International trade must take place orderly under the uniform control and guidance of the nation.”

The journal asserts that even though a variety of offices are engaged in trade, they must first receive government permission, follow government guidelines, and operate in a government-created environment. The central government must standardize prices and designs of selected export goods from each trading company.

The Daily NK reports that preparations for Kim Jong il’s successor government are ushering in an end to Songun:

North Korea has embarked on a rehabilitation of the Chosun (North Korea) Workers’ Party’s authority, meaning a return to party-centered politics from military-oriented politics, various inside sources suggest. The move could be related Kim Jong Il’s choice of successor.

In late February, a number of sources told the Daily NK through telephone interviews that instructions came down from the Party to each province on February 1st to “pay more respect to the local party apparatus than to the armed forces.”

Various sources said, “The rumours say that the instructions are intended for everyone (resident of Hoeryong)”, “Foreign currency-earning workers were given a mass lecture on this subject in mid-February (resident of Chongjin)”, and “People welcomed the command, hoping for less harassment from the army (resident of Hyesan)”.

Wat is happening in the government?

Last October, Kim Jong Il reappointed his brother-in-law and closest advisor, Jang Sung Taek, to the Director of the Administration Department, which has the responsibility for the National Security Agency, the People’s Safety Agency, and the Prosecutors’ Office. More recently, the Guidance Department undertook a large-scale inspection of the United Front Department, which signals an attempt to strengthen the Party.

The Guidance Department of the Party is the department tasked with leading and inspecting the Party apparatus. It also resides at the core of the North Korean power structure and is under Kim Jong Il’s direct control, so its involvement demonstrates the gravity of this investigation.

Sohn Kwang Ju, the chief editor of Daily NK and an expert on Kim Jong Il, suggested that, “Kim Jong Il, thinking that North Korea has already achieved military strength through the possession of nuclear weapons, is now starting to reconstruct the Party-centered order and revive the Party’s authority.”

Will it work?

Hwang Jang Yop, President of the Committee for the Democratization of North Korea and the former North Korean Foreign Secretary, gave a similar analysis. According to him, “Kim Jong Il, sooner or later, will strengthen the Party’s authority, especially that of the Guidance Department because the Vice-Director position of the Guidance Department should eventually be taken by one of Kim’s sons.”

Nevertheless, many experts expect difficulty for Kim Jong Il in his effort to strengthen the authority of the Party.

Han Ki Hong, the president of the Network for North Korean Democracy and Human Rights, said that “Kim Jong Il has been running his country under the abnormal system of the Military-First policy for over a decade. Throughout that time, the Party’s authority totally collapsed and the armed forces’ power and authority has increased beyond control, and this is irrevocable.”

The full article can be read here:
Possible Shift from the Army to the Party in 10 years
Daily NK
Choi Choel Hee & Lee Sung Jin
3/5/2008

Institute for Far Eastern Studies (IFES)
NK Brief No. 08-3-3-1
3/3/2008

In the latest issue (February 3rd) of the DPRK Cabinet bulletin, “Democratic Chosun”, it was reported that the first extended cabinet meeting of the year opened in the beginning of February, with Premier Kim Young-il presiding. The bulletin stated that the issue of accomplishing this year’s economic plans was discussed.

At the meeting, Vice Premier Kwak Bum-ki stressed that accomplishing this year’s economic goals was “essential for opening the doors to a breakthrough for building an economically strong nation,” and that it was the “fundamental task laid out before the Cabinet.” He went on to reveal the tasks and directives needed to revitalize all realms of socialist construction, which he stated was necessary to create a powerful and prosperous nation by 2012, the centennial anniversary of the birth of the late Kim Il Sung.

In particular, he called for the production of the “lifeline of socialist construction”, and specifically, electricity, coal, metal, and railways, which he referred to as the “four lines for the advance of the people’s economy.”

Accordingly, the goal of carrying out overwhelming repairs to power generation facilities, and at the same time constructing new power plants in order to increase electrical production capabilities by several hundred thousand kilowatts, was proposed.

The meeting also stressed the need for concentrating efforts on geological exploration and exploitation industries in order to reasonably development and use natural resources, for a change in production of goods necessary for daily life, and for a resolution to the people’s ‘eating problem’ alluded to in the recent New Year’s Joint Editorial.

The bulletin also reported that there was discussion on creating a new five-year plan for the development of science and technology, going as far as to say, ”the role of science and technology in the building of an economically powerful nation is decidedly large, and in order to answer the very real calls for development, [the issue of] strengthening international economic projects” was brought up.

Premier Kim Young-il, Vice-Premier Kwak Bum-ki, Chairman Kim Kwang-rin, of the Committee on National Planning, Park Nam-jil, of the Power Supply Industry Bureau, and Kim Yong-sam, from the Railways Bureau, were among cabinet ministers present.

Daily NK
Yang Jung A
1/27/2008

An expert on North Korea has recently disputed a widely circulated claim that North Korea’s hard line diplomacy is due to influence from the North Korean military.

Park Young Tack, an active duty officer at the Korea Institute for Defense Analyses (KIDA) said, “The North Korean military usually influences the policy decisions that are related to military roles and functions only.” Park wrote this in his recent article published on January 15 in the 2007 winter edition of the Korean Journal of Defense Analysis entitled ‘The Increasing Standing of the North Korean Military and the Military’s Influence on Decision Making’.

Park said, “Unless Kim Jong Il asks the military for opinions, the military cannot take part in matters other than its own.”

It is widely believed at home and abroad that the North Korean military exerts huge influence on the country’s major policy decisions and therefore is responsible for driving the country to take a hard line.

U.S, envoy Christopher Hill said prior to his visit to Pyongyang last year that he would like to meet high-ranking military officials and persuade them to give up the country’s nuclear programs.

Park said, “It is mistaken to believe that the standing of the military is superior to that of the Party as was the case in the past, and that the military plays a key role in decision making regarding the country’s fate.”

“Many believe that the North Korean military is trying to get in the way of the inter-Korean dialogues. However, that is exactly how the Party wants the world to assess the current situation in North Korea. It is my judgment that the Party has been manipulating the situation so that the military appears to take on the role of the hard-liners,” Park said. Park stressed that the General Political Bureau of the People’s Army by itself cannot voice opposition to the nation’s current policy toward South Korea.

Park said that Secretary for Military Munitions Jun Byung Ho, United Front Department Director Kim Yang Gon, and First Vice Foreign Minister Kang Suk Ju have established and are operating a direct reporting system to Kim Jong Il. Secretary Jun is currently responsible for conducting the country’s nuclear tests, Director Kim for operations of the policy through the direct reporting system [to Kim Jong Il], and Minister Kang for foreign announcements.

“It seems that Kim Jong Il allows the military to exert influence on decision making to some extent as a reward for the military’s pledge to help build and defend the absolute dictatorship of Kim Jong Il,” Park said.

“The military circles take part in making policy decisions by offering specialized suggestions and by advocating the Kim Jong Il regime which adopted the ‘Military-First’ policy among the ruling elite, the leaders from the middle class and the lower class,” Park said. However, Park added that the military has limited influence over matters other than its own.

Park said that Kim Jong Il is also strengthening the military-friendly system to watch and hold in check the military, which can pose the biggest threat to his regime.

“When making decisions, Kim Jong Il calls the ruling elite individually for consultations and has them report to him directly,” Park said, adding, “In any case, Kim Jong Il is at the center of the decision making process and stands at the top of the decision making ladder.”

“Kim Jong Il is a policy developer who issues policy proposals more frequently than anyone in the country. Any policy proposed by Kim is considered a supreme order and becomes a law,” Park said. “If an individual at the lower levels of the state wants to make a policy proposal, he usually first contacts an authority in the relevant field who then tries to read Kim Jong Il’s mind on the policy to be proposed. Only after he receives convincing words from the authorities, the low-level cadre is able to submit his proposal. That way, he can escape censure that would result from making an unsuccessful policy proposal.”

Park said that those working at the lower level of the state authorities cooperate with each other even if they work in different departments. If there are any policy shortcomings, they try to solve them together and share the responsibilities. They also create a task force between departments for policy implementation.

Park said, “This kind of political operation has come into existence for the following reasons: First of all, Kim Jong Il prefers to have an inner-circle, minimize the number of personnel, and simplify office procedures. Second, people at the working level have to worry about censure waiting for them when their policy implementation efforts end in failure.”

“Kim Jong Il’s administration style shows that he relies on an informal channel of communication with the ruling elite.” Park said, “He keeps a tight reign on all power groups within the country including the military, and no power group dares to challenge Kim’s authority. Even if united, these groups can hardly exercise any significant influence over decision making.”

Daily NK
Sohn Kwang Joo
12/6/2007

It was in Yanji where I met the 25-year-old defector, Kim Soo Mee. She was born and raised in the mountains that separated her village from larger towns in Hamkyung Province.

Because of her mother’s ferver for educating her children, Kim Soo Mee was able to attend the First Senior Middle School, a specialized school for gifted students, following her timely graduation from primary school.

When she was 12 years old, the national famine greatly affected her town. People scattered about the streets looking for food, and dead bodies could be seen everywhere. Many students stopped going to school and instead spent their days searching for food. However, Soo Mee’s mother urged her to continue with her studies. With her mother’s encouragement, Soo Mee gained acceptance into a prestigious university in North Korea.

She received good grades at the university and had high hopes of working in a well-established company in Pyongyang. However, due to her family background, she was forced to remain and work in the small rural town.

The living conditions in North Korea’s capitol are surprisingly different compared to the local cities.

Kim Soo Mee explained about the corruption surrounding university admissions in North Korea. “Only children who grow up in rich families can be admitted to the universities in Pyongyang, as huge sums of money are needed to bribe institution administrators. For example, if a student wants to attend Kim Il Sung University, often times a family will pay upwards of 1,000 dollars just to afford the child a chance of getting accepted. Pyongyang Medical College and Kim Hyong Jik College of Education usually require approximately 500 dollars in bribes.”

I was curious to ask, “Can a student bribe their way into a school even if he or she does not have good grades?”

She explained that such students are instructed to leave certain indicating marks on their test paper at the college entrance examination as a way for evaluators to discern whether the student offered a bribe or not. The evaluators rank the students by the amount in bribes their families have paid, and then rank them according to their family background.

Her college life was unbearable because she had no financial power or a strong family background to support her.

385 days out of her college years were spent practicing for the 40 seconds of the military parade it would take to pass by Kim Jong Il’s podium. The average student spends almost two and a half years preparing for national events such as military parades and agricultural support activities that take place in the Spring and Fall. These hardships led Soo Mee and many of her fellow students to dream of going abroad.

The most popular jobs after graduation include diplomatic posts and working in foreign currency-making companies. She went on to explain that it is now undesirable to work as a discharged soldier or a member of the Party.

As for the common perception of Kim Jong Il among North Korean youths, she maintained that “through propaganda, the people are made to believe that the General (Kim Jong Il) ‘s meals consist of only a few rice balls and salted radish. However, I was shocked to find out that preparation of the General’s meals costs 1,000 dollars.” This information was told to her by a researcher from Kim Il Sung and Kim Jong Il’s Longevity Institute.

Most of the intellectual students have an unfavorable opinion about Kim Jong Il, but the general public does not see the truth behind his lies.

“In the movie, ‘Geumjin River’ (2004), there is a line that states, ‘We are poor because the heavens took away our Supreme Leader (Kim Il Sung) in wrath because the people did not respectfully take care of him.’ The authorities are currently insisting that our country is now poor because of imperialistic pressures and economic sanctions imposed on us by America.”

I asked, “What do the Pyongyang citizens think about the future of North Korea?”

“Most think that we should open and reform our state, but they can never mention the words ‘open’ and ‘reform’ in public,” she replied. “The authorities often proclaim that we can attain wealth by properly following the Military-First Policy and by establishing a strong economic society. But the problem is they do not tell us how to do so. The only people not doing business in the jangmadang are cadres of the Party, generals of the Army and National Security or Safety Agents; they maintain favorable living conditions by collecting bribes from the citizens.”

Institute for Far Eastern Studies (IFES)
NK Brief No. 07-10-18-1
10/18/2007

One year after the DPRK nuclear test, North Korea is still focusing all of their policy efforts on restoring their economy. North Korean leaders are convinced that an economic revival is crucial for the survival and stability of their regime.

The DPRK stated in this year’s New Year Joint Editorial, a publication that presents the regime’s policy direction for the year, that “the founding of a strong national economy is a crucial requirement for the revolution and advancement of our society, and is a historic undertaking toward becoming a fully prosperous and powerful nation.” The emphasis on “focusing all the state’s efforts on solving the economic issue,” was indicative of their sense of imminence regarding economic revival.

The Joint Editorial presenting the DPRK’s national goal of “founding a strong national economy” came out three months after the October nuclear test, which took place just over one year ago. Since its publication, the North Korean media has been stressing that the DPRK already realized powerful military strength and strong political ideology, and must now strive to establish a strong national economy. The military might of the nation was epitomized by the success of the nuclear test.

A copy of the North Korean quarterly publication “Politics & Law Review” obtained on September 14th emphasized the need to establish a strong national economy, stating that “without a strong national economy, it is impossible to strengthen the forces of political ideology and military power,” and, “the only way to block the infiltration of economic imperialism is by strengthening economic power.” It also added that “if we are weaker than South Korea, we will naturally look to them and depend on them.”

North Korean press claims that Kim Jong Il’s decision to carry out a nuclear test was the reason the 6-party talks have been working since January’s meeting between the United States and the DPRK in Berlin, thus easing tensions on the Korean peninsula by ameliorating the U.S.-DPRK relationship and advancing inter-Korean relations. The fact that 18 out of 55 public appearances (a significantly higher proportion than that of last year) made by Kim Jong Il this year were visits to economic bureaus also reflects North Korea’s economic ‘all-in.’ North Korea’s pro-active movement toward ameliorating relations with the United States, and its determination to expand inter-Korean economic cooperation, all stem from its urgency to develop their economy in order to stabilize their regime.

Frontline Club (h/t Kitten Wars)
1/17/2007

Paul French, Director of Access Asia–a market research and business intelligence company specialising in China and North Asia’s economics and markets, spoke to the Economist’s Simon Long about what he has witnessed and learned about North Korea.

He focuses mainly on his perceptions of the US/DPRK relationship, but he also talks about the difficulties of bringing investment capital into the DPRK.

Click on “Frontline club” at the top of the picture above to see the video.

Yonhap
8/15/2007

North Korea, celebrating the 62nd anniversary of Korea’s liberation from Japan’s 1910-45 colonial rule on Wednesday, called on its people to make concerted efforts to build a strong socialist economy.

The Rodong Sinmun, the official newspaper of the North’s Workers’ Party, said in an editorial that there is no more urgent task than reconstructing the national economy and improving the people’s livelihood.

“On the economic front, the principles of socialism and utilitarianism should be thoroughly observed … All potentials and resources should be fully mobilized to boost production and construction,” said the paper.

“Food problem has to be addressed, while the light industry sector has to be revolutionized in order to mass-produce high-quality consumer products. Economic reconstruction and improvement of public livelihood are the most urgent tasks facing the nation.”

But the editorial still allotted much of its space to eulogizing the accomplishments of the North’s late founding leader Kim Il-sung and his Songun (military first) policy.

“The president’s plan for building a rich and powerful country is being carried out in all fields thanks to the Songun leadership of Kim Jong-il. The country in which the great Songun politics is being successfully applied will make ceaseless creations and leaping progresses and the president’s behest will come true in the socialist country,” said the paper, referring to the elder Kim as the president.