Archive for the ‘Political economy’ Category

New Party Central Auditing Commission inaugurated

Wednesday, May 11th, 2016

New-central-auditing-commission

According to the Pyongyang Times (2016-5-10):

The First Plenary Session of the 7th Central Auditing Commission of the Workers’ Party of Korea was held on May 9.

The event was attended by the members of the Party Central Auditing Commission who have been elected at the Seventh WPK Congress.

There was an election of the chairman and vice-chairman of the Party Central Auditing Commission.

Choe Sung Ho was elected chairman with Pak Myong Sun as his deputy.

According to the Ministry of Unification, the Party Central Auditing Commission, as its name suggests, inspects the party’s financial management.

This is interesting because this story originated in KCNA, though no pictures were released. However, the KCNA story was picked up by the Pyongyang Times, and this second version does contain pictures indicating that Kim Jong-un ran the meeting (See pictures at the top), even though he is not mentioned in the text of the article.

I am not sure of the meeting room location or where the Auditing Commission is physically located, but the meeting did not take place in Conference Hall No. 1 next to the Central Committee Building, Kim Jong-un’s official office.

Kim’s meeting at the Auditing Commission has not been reported in the Rodong Sinmun, the KWP newspaper, to the best of my knowledge.

The cheap and fast analysis suggests that as this is Kim Jong-un’s first committee meeting following the party congress, he is making a priority of understanding/controlling party finances in an effort to be a more assertive party leader (he was just named party chairman after all). Following a thorough party audit, Kim will be in a better position to allocate party financial rents to key supporters as well as to critically engage other cadres over party operations.

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Why agricultural reform may appear on the Worker’s Party Congress agenda, and why it might not

Thursday, May 5th, 2016

By Benjamin Katzeff Silberstein

At this time of writing, the 7th Party Congress of the Korean Worker’s Party is only one day away. In the runup to the congress, as is natural, there has been much speculation about what the congress content will actually be. Most analyses seems to believe that personal and institutional decisions will be at the center, but there have also been speculations that policy proclamations may be made in areas such as agriculture.

This post is not an attempt at forecasting, an often fruitless endeavor.  Rather than predictions, this post offers a few reasons why agricultural reform may be on the agenda for the congress in some shape or form, and a few reasons to believe the opposite.

Why agricultural reform may show up…

The first thing to note is that the North Koreans themselves rarely (or never) use the term “reform” to describe economic policy changes. If such changes are announced, they will probably be called “improvements” or simply “changes”. In any case, the arguably strongest reason to believe that liberalizing policy changes may appear on the congress agenda is that they seem to be working, at least from the perspective of the North Korean government.

Recall that last summer, North Korean press touted the efficiency of the small work-team structures and similar management policy changes in agriculture. Contrary to recent reports about reduced harvests due to the drought, North Korean media claimed that harvests were going up. Earlier, in 2012, journalists were invited to farms to hear farmers themselves speak about the policy changes, a clear indication that the regime was comfortably and formally toying with the rules. At least for some farmers: it is very possible that the reforms were rolled out on a trial-basis, and that they later got stuck in the bureaucratic mills or were deemed too radical. In sum, North Korean media outlets themselves have touted the reforms as successful, and though media reports do not amount to official policy proclamations, they are often good indicators for what’s going on behind the scenes.

…and why it might not.

On the other hand, agriculture has been conspicuously absent from several major publications and proclamations about policy priorities and successes over the past year. For example, agriculture only showed up once in the slogans the regime published earlier this year, while industry received several central shout-outs. Reforms or policy changes in agriculture were not mentioned at all. There are also reasons to doubt that agricultural reforms really did have a strong impact on harvests in 2015 — the increase in harvest output began earlier than state media started mentioning reforms.

Moreover, reports on economic output which the regime published only a few days ago only mentioned agriculture almost in passing. The reports only spoke about how farmers had diligently met their quotas for gathering fertilizer, and did not mention policy changes:

Farming preparations were brisk on the agricultural front, resulting in a 1.7 and 2.8 times growth in the securing of hukposan and microbial fertilizers and an over 1.3 times increase in the acreage of field carpeted with humus soil.

[…]

The production of homemade fertilizers and their transport, tractor overhauling and maintenance and other farming preparations are nearing completion thanks to the devoted drive of agricultural workers across the country.

[…]

Such successes are reported from railway, agricultural and other industrial sectors.

It’s socialist economics as usual, in other words: people work hard according to the planned quotas, and fulfill them because the state told them to do so. Moreover, the Washington Post’s report on Wednesday from a collective farm near Pyongyang did not mention any talk of policy changes in agriculture.

None of this sounds like the propaganda buildup one would expect in the weeks before a grand policy announcement. At least we won’t have to wait too long before we know.

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Kim Jong-un’s Party Congress prep: construction projects

Tuesday, April 19th, 2016

By Benjamin Katzeff Silberstein

Kim Jong-un has made at least two announcements recently, as the Korean Worker’s Party heads for its 7th Party Congress in May, about construction projects to be done. One of them is an orphanage in Ryanggang province, Daily NK reports:

Projects underway to promote Kim Jong Un’s legacy as a leader ahead of the 7th Party Congress in May are said to be in full swing across the nation. One such project taking place in Ryanggang Province calls for the full mobilization of residents to build an orphanage as an expression of the leader’s “love for the next generation,” Daily NK has learned.

“Authorities have recently been harassing residents saying that the orphanage under construction next to Kim Jong Suk Teachers’ College in Yonbong-dong needs to be ready for the Marshal’s (Kim Jong Un) inspection by the time of the Party Congress,” a source in Ryanggang Province told Daily NK on Thursday. “The provincial party office has been hurrying people along, claiming the construction must be completed before the event.”

Progress was said to be slow during the winter, which was unseasonably cold, but construction efforts are now appearing to ramp up.

The project is being driven by the provincial head secretary and other cadres from the provincial Party and People’s Committee and is being promoted as a means to express loyalty to the leader, who has emphasized his “love for children,” said the source.

She added that cadres associated with the efforts, who have confidently stated that the facility will see completion before the Party Congress, have also been intensifying crackdowns on those seeking to avoid mobilization, out of concern that failure to complete the project on time may lead to issues of accountability.

“Vendors who are busy trying to make a living in the market were often able to get out (of mobilization) with bribes, but even that isn’t easy now,” a separate source in Ryanggang Province explained.

“The price for skipping a day of mobilization is now up to 10 RMB (13,000 KPW) a day per head, so some find it more affordable to just go to the construction site.”

The 13,000 KPW demanded is enough to purchase approximately 2kg of rice based on current prices, which is far from negligible for most members of the public. The higher price tag in effect acts as a tool to turn up the heat on people for mobilization.

The pressure to complete the project before the major political gathering has led to mobilization of students in the afternoons and workers at state-run factory as well.

The near full mobilization also involves specialized colleges, meaning that among the younger generation, stormtroopers (who are working on a railway project in Samjiyon) are seemingly the only group among ordinary residents that are exempt from the orphanage project.

Full article:
Kim Jong Un calls for construction of new orphanage in time for Party Congress
Kang Mi Jin
Daily NK
2016-04-19

IFES at Kyungnam University has also published an analysis of the news about the Ryomyong street project, which Curtis has already written about in this blog. They note that the recent sanctions do not seem to have altered plans for the project. Kim Jong-un’s rhetoric instead highlights the project as a blow against the international community and the US — North Korea will go full steam ahead on its own policies and no outside pressure can hold them back (my emphasis below):

On March 18, the state media Korean Central News Agency (KCNA) reported that Kim Jong Un declared the construction of ‘Ryomyong Street’, which is to be built between Kumsusan Palace of the Sun and the Ryonghung Crossroads in Pyongyang. The street’s name signifies a place where ‘the dawn breaks in the Korean revolution’. Kim also mentioned that the area is to be surrounded by magnificent skyscrapers and multi-level buildings that fit the geographical characteristics surrounding the palace, displaying the Party’s idea of giving importance to science and talents in socialist Korea.
[…]
Along these lines, Kim put emphasis on the policy of securing building materials in constructing the new street and to diversify the size, design and color of decorative objects on the exterior of buildings. He also instructed for the mobilization of ‘soldier-builders’ who previously worked on the construction of Mirae Scientists Street. The construction of the new street shall be carried out with “Mallima speed” during the country’s ‘70-day campaign’ in run-up to the Party Congress scheduled for this upcoming May. The news report also stated that “the party, state, and society should render positive assistance to the construction and the Cabinet, commissions, ministries and national institutions take the lead in this work.”

According to the report, Kim Jong Un also said that “The construction of the street is not merely for formation of a street but serves as a political occasion of clearly showing the spirit of the DPRK standing up and keeping up with the world, despite all sorts of sanctions and pressure by U.S. imperialists and their followers, the appearance of the country advancing to realize the great ideal of the people and truth that the DPRK is able to be well-off in its own way and nothing is impossible for it to do.” The construction of the street appears in part as a means to show off the strength of ‘Songun’ Korea, following in the footsteps of Kim Jong Il’s policy.

Despite the strong sanctions imposed upon the country by the international community, North Korea is striving to achieve some form of economic success. The 70-day campaign has been initiated in the run-up to the Seventh Congress of the Workers’ Party. North Korean media are boasting about the country’s successes on the production front since the campaign’s initiation, saying “under the Juche ideology, people are working hard especially in the fields of electricity, coal, metal, and railroad transportation that they have achieved great success in the [campaign’s] first week.”

Full article here:
North Korea to Construct ‘Ryomyong Street’ Despite Sanctions
Institute for Far Eastern Studies
03-29-2016

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North Korean state takes over foreign currency stores

Tuesday, April 19th, 2016

By Benjamin Katzeff Silberstein

Donju life might not always be what it is cracked up to be. Radio Free Asia reminds us that regardless of how well North Korea’s upper-middle class traders might be doing, the economic framework is still highly arbitrary:

North Korean hard currency shops providing foreign products for sale to the country’s wealthier citizens may soon see a full government takeover of its supply chains, leading to a drop in the quality and hike in the price of hard-to-obtain goods, North Korean sources say.

The stores, which require payment in Chinese yuan or U.S. dollars, have operated in recent years in Pyongyang and other large cities under the management of private businessmen who pay large portions of their profits to the central government.

Government-run trading firms are now poised to take over the purchase and pricing of products sold in the lucrative stores, though, a source in China’s Dandong city, just across the Yalu river from North Korea, told RFA’s Korean Service.

Until now, shop managers have gone to China themselves to bring back products—including clothing, cosmetics, and furniture—or sale in their stores, RFA’s source said, speaking on condition of anonymity.

“If this system of supply changes, not only will store managers be prevented from going to China, but no use will be made of their marketing and management skills,” the source said.

Once the new system is implemented, stores will have to submit a list of needed products to their city’s local trading firm, which will then make the purchases from China itself, the source said.

“There are doubts that [the government] will be able to supply needed products on time, though, and the change in quality and price of the items may lead to conflicts between store managers and the trading organizations handling product supply,” he said.

Profit grab seen

Separately, a source in the capital Pyongyang said no official statement announcing the change has yet been made.

“But there is a high possibility the new system will be established after the [ruling Korean Workers’ Party] convention in May,” he said.

If put in place, the move may be aimed partly at further reducing the profits earned by store managers, who already pay most of what they earn to the government of the reclusive, U.N.-sanctioned state, the source in Pyongyang said.

“North Korea’s foreign currency situation is urgent now,” the source said.

“From now on, the managers of foreign-currency shops will receive only a small salary, as they did in the past,” he said.

“Sales will drop, though, and the management will experience difficulties,” he said.

Full article here:
North Korean ‘Foreign Currency’ Stores Face State Takeover
Jonhoo Kim
Radio Free Asia
04-19-2016

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North Korea’s natural resource risks: Kim Jong-il’s own take

Thursday, April 14th, 2016

By Benjamin Katzeff Silberstein

As North Korea debates and experiments in economic strategies, it’s always interesting to go back and look at older debates of a similar nature. While reading vol. 14 of Kim Jong-il’s Collected Works (Sonjib) I stumbled upon an interesting speech attributed to Kim from 1995.* Whether it was foresight or just common logic of political economy, Kim actually warned of the risks of North Korea becoming a mere natural resource exporter to other countries, without reaping the full benefits of trade. Recall that one of the charges against Jang Song-taek was selling out the country’s natural resources for his own benefit. The issue itself, of course, is much older.

In the speech, given to an audience of Central Committee functionaries, Kim attacks cadres that have a faulty understanding of foreign trade under socialism, and think only about how their own “units” (단위) can make foreign currency profits (p. 8). He also emphasizes the need to calculate all the costs involved with foreign trade, including production costs at home, to calculate actual profit.

The most interesting part, in my opinion, however, is where Kim gets to the natural resource question. Kim states that natural resources shouldn’t just be sold to other countries, but processed (가공) domestically to the greatest extent possible (p. 10). He says that “now, capitalists are buying natural resources at a cheap price from our country, processing them and selling them to a higher price.”

Kim complains that it’s a grave crime that capitalists are pocketing their own wallets by selling off North Korea’s own resources by processing them, and that North Korea could become mere suppliers to monopoly capitalism if it doesn’t start processing their natural resources itself. He also states that those who just sell off natural resources without processing are just like slaves to foreign countries.

Kim also warns people about thinking that foreign currency can be earned “for free.” “The imperialists and capitalists never give anything to anyone for free,” Kim states, and says that if capitalists say they have anything to give, it is because they have their own desires” (p. 11).

This speech is a reminder that North Korea has grappled with how to handle its natural resources for a long time, and it suggests that controversies abounded in the 1990s as well.

*These works are sometimes edited after the fact, sometimes several times over, but this edition is from 2000, published by the Worker’s Party Publisher (N’odongd’ang chulpan’sa). All translations are my own, and if anyone has any corrections to offer, please get in touch.

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Kim Jong-un’s mother’s grave (Ko Yong-hui)

Friday, April 8th, 2016

I reported this in Radio Free Asia last week….

It has never been announced in the North Korean media, but Kim Jong-un has “quietly” built a grave for his mother, Ko Yong-hui, on Mt. Taesong.

Ko-grave-2016-4-8

Pictured above (Google Earth): The grave of Kim Jong-un’s mother, Ko Yong-hui.

The site where the grave was built was cleared of a few small buildings by May 2012 (Kim Jong-il died in December 2011).  Construction appears to have been completed by October 2012.

Although the grave is on Mt. Taesong, it does not appear to be a revolutionary site. It is not featured on a nearby map of revolutionary sites on Mt. Taesong, and North Koreans are not being brought to it by the bus load (very little traffic in fact). Kim jong-un may have visited the grave unofficially, but never as a public ritual. The only foreigner I have spoken to who has visited the site saw only one guard on duty. So maybe someday years from now it is intended to be a revolutionary site, but not for now.

Back in 2010, Michael Madden posted this picture of Ms. Ko’s birthplace in Osaka, Japan. I was able to locate it on Google Earth at these coordinates:  34.663147°, 135.531080°

Ko-birthplace

Ko’s father (Kim Jong-un’s maternal grandfather) was buried on Jeju-do in South Korea, but the family had his grave moved to an undisclosed location to prevent it from attracting crowds. It is highly unlikely that Kim Jong-un will ever visit this grave.

UPDATE: A reader sent in this very helpful information:

Ko’s father is not buried on Jeju-Do! This grave is a so-called “가묘”, an “empty or fake grave”. The reason for erecting a “가묘” was to be able to perform the (in Korean culture) important ancestor rites, since they are actually without any remains of the deceased since their whereabouts are mostly unknown. Especially after the Korean War, many “가묘” were erected in Korea, because many family members just disappeared …

Here is more information about the “fake” tomb of Kim Jong Un’s grandfather in Jeju-Do: http://m.blog.daum.net/_blog/_m/articleView.do?blogid=0Li0k&articleno=7763730

Under the photo it is written “가묘” (for the empty/fake tomb)

On the tombstone you may read the following sentence:  “사정에따라 허총을 만들다” (because of circumstances an empty/fake tomb was made)

Here they use 허총, this word has the same meaning as 가묘.

Further the following is written on the tombstone:

“His name was 고경택 (Ko Kyong-thaek)

He was born in 1913, in 1929  he moved to Japan and he died in 1999.

The last two lines mention the name of his father (Ko Yong-ok) and his six sons: Ko Yong Hun, Bong Hun, In Hun, Kwang Hun, Chol Hun and Sang Hun.

His daughters (among them obviously Ko Yong Hui) are not mentioned.

Those 가묘/허총 (fake tombs) can also be seen in North Korea!

The Korean wiki-page about the Patriotic Martyrers Cemetery in Pyongyang includes the following information:

“대한민국에서 사망한 김삼룡, 김달삼, 최일천, 조봉암, 김종태, 최영도, 최백근, 이현상 등은 가묘 형태로 묘소가 마련되어 있다.”

 Roughly: (all the mentioned martyrs) died in South Korea, that is why a 가묘 had to be set up …
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Chinese local governments formally notified of sanctions against North Korea

Monday, March 21st, 2016

By Benjamin Katzeff Silberstein

I’m not sure if this is anything out of the ordinary or if this is the formal routine every time sanctions have been passed. Nevertheless, it’s an interesting development. If sanctions against North Korea are ever to hit the economy where it hurts, Chinese local governments are perhaps the most important implementers since much (or most) of North Korea’s external trade occurs with them. Korea Herald:

China has notified its local governments on how to implement new U.N. sanctions on North Korea, including specific measures on imports from North Korea, a diplomatic source with knowledge of the matter said Monday.

Kim Hong-kyun, South Korea’s chief nuclear envoy, held talks with his Chinese counterpart, Wu Dawei, last Friday as the two nations vowed to fully implement the new U.N. sanctions against North Korea’s fourth nuclear test and rocket launch.

During the talks, Wu told Kim that China has been “in the process of implementing the new U.N. resolution on North Korea,” said the source, who attended the Friday meeting.

“The Chinese side also believes that strong sanctions are needed to show its sincerity on denuclearization,” the source said.

Earlier this month, the U.N. Security Council levied tougher sanctions against North Korea’s fourth nuclear test on Jan. 6 and the Feb. 7 launch of a long-range rocket, both of which violated previous U.N. resolutions.

The new U.N. sanctions require countries to limit or ban imports of North Korean coal, iron ore and other mineral resources if the proceeds are used for the North’s nuclear and missile programs.

One of the potential loopholes is a provision that allows North Korea to continue exports of coal and iron ore if such transactions are for “livelihood purposes.”

Full article here:
China notifies local gov’ts of new U.N. sanctions on N. Korea
Yonhap News/Korea Herald
2016-03-21

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Friday fun with North Korea’s new slogans

Friday, February 19th, 2016

By Benjamin Katzeff Silberstein

What better way to start off the weekend than to go through North Korea’s latest batch of political slogans (“Joint calls/공동구호”)? These were issued collectively by the Central Committee and the Central Military Commission on Wednesday February 17th, and printed on the frontpage of Rodong Sinmunas part of the run-up to the 7th Party Congress to be held later this year.

Below I have gathered those that relate to the economy, and a few other interesting ones, with brief annotation:

The calls underlined the need to make hurrah for the WPK and socialism resound far more loudly this year when the Seventh Congress of the WPK is to be held by staging an all-out death-defying struggle for building a thriving nation and improving the people’s living standard.

The Byungjin line is alive and well.

Let’s dynamically wage this year’s general advance in the same spirit as shown in succeeding in the H-bomb test!

Let’s build an economic giant as early as possible with the strength and the spirit of Korea and at the Korean speed!

Send more satellites of Juche Korea into space!

As often before, the satellite launch and the hydrogen bomb test are tied into the theme of economic development: both are technological advancements, showing the overall progress of the economy.

Produce more new-generation electric locomotives and passenger cars!

A shout-out to the domestic car industry?

Put the manufacture of Korean-style world-class underground trains on a serial basis!

The domestically manufactured subway cars haven’t been forgotten. One wonders if people living outside Pyongyang feel as strongly about them.

Step up the modernization of the mining industry and keep the production of nonferrous metal and non-metallic minerals going at a high rate!

Provide more resources for building an economic giant by channeling effort into prospecting underground resources!

At least now Jang Song-taek can’t touch them anymore.

Make the foreign trade multilateral and diverse!

This is interesting, and a clear statement about an important rationale for the SEZs: North Korea will remain politically and economically vulnerable as long as China continues to be its single largest trading partner by a large margin.

Let’s greet the 7th Party Congress with proud achievements in the improvement of the people’s living standard!

The people “will never have to tighten their belts again”, as Kim Jong-un said in his first public speech in 2012.

Achieve a great victory on the front of agriculture this year!

Which the regime has already claimed it did last year. The UN doesn’t agree.

Let’s give a decisive solution to the problem of consumer goods!

Let’s produce more world-competitive famous products and goods!

North Korean media has highlighted strides in consumer goods production several times this year.

Make Wonsan area an icon of city layout and build it into a world-level tourist city!

A shout-out to the Wonsan tourist zone, presumably.

Establish Korean-style economic management method guided by the Juche idea in a comprehensive manner!

Sounds like the management reforms, with greater autonomy for enterprises, are still on the table.

Let the entire party and army and all the people turn out in the forest restoration campaign!

And make sure they “properly conduct fertilizer management“. This is the only reference among the slogans to the forestry campaign, where the regime has publically acknowledged some crucial and systemic problems, but is yet to find a credible solution.

Put an end to proclivity to import!

Does this tell us something about North Korea’s trade balance that the numbers aren’t showing?

The Korean People’s Internal Security Forces should sharpen the sword for defending their leader, system and people!

Note that “people” comes after both “leader” and “system”.

Let us thoroughly implement our Party’s policy of putting all the people under arms and turning the whole country into a fortress!

Enhance the fighting capacity of the Worker-Peasant Red Guards by intensifying their drills as the anti-Japanese guerillas did in Mt. Paektu!

Develop and produce a greater number of various means of military strike of our own style that are capable of overwhelming the enemy!

Enhance the fighting capacity of the Worker-Peasant Red Guards by intensifying their drills as the anti-Japanese guerillas did in Mt. Paektu!

These four slogans seem to be saying that the Four Military Guidelines, adopted in 1962 by the Central Committee, are still very much in play: 1) arming the population, 2) fortifying the country, 3) establishing a cadre-based army, and 4) modernizing military equipment. Mao would probably have been happy to know that his People’s War Doctrine lives on in North Korea.

The whole list of slogans is very long, and saying that policy areas need to improve, or that production in a certain area needs to go up, isn’t much of a policy line. Still, it’s interesting to see what areas are highlighted.

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Economic reforms to come at North Korea’s Party Congress, Daily NK says

Monday, January 11th, 2016

By Benjamin Katzeff Silberstein

Daily NK today carries a piece reporting on economic reforms to potentially come at the Korean Worker’s Party Congress coming up this year:

In terms of the possibility of declaring new economic reforms, the source explained he would announce reform measures that stay within the overall framework of socialism. Taking an extra step forward from the new economic management system’s ‘June 28 Measures,’ which pertained to agricultural policies, the pending package of reforms will include provisions authorizing individuals to directly manage factories. In practice, this would enable the state to collect more taxes from the donju [newly affluent middle class] by providing them with more freedom to make money.

Aspects of these changes are already underway in select locales. “In some regions, municipal People’s Committee business offices have been granting donju increased license to earn money,” he said. “Provided that people can offer up the initial 6,000 RMB fee and build their own factories with basic infrastructure such as sanitation facilities they are relatively uninhibited in their business operations.”

Hints at reforms like these were largely absent from Kim Jong-un’s New Year’s Address, I argued in an earlier post.

Read the full article:
Major organizational changes to be announced at Party Congress
Choi Song Min
Daily NK
2016-01-11

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The economy in Kim Jong-un’s New Year’s address: what’s there and what isn’t

Sunday, January 10th, 2016

By Benjamin Katzeff Silberstein

The supposed hydrogen bomb test has come to dominate the news on North Korea over the past few days, for obvious reasons. Kim Jong-un’s New Year’s Address has naturally ended up in the shadow of the nuclear test, but it is worth going back for a closer look. Overall, it is a speech that appears to contain few major announcements or indications. Perhaps more surprising than what themes are there, are the themes that are absent.

Stephan Haggard pretty much sums up how economic matters are treated in the speech, as they often are in North Korean rhetoric on economics: “As usual, the economic components of the speech rely more on exhortation than any clear policy message, confusing results with the means of achieving them.”

That is, in much of the speech, Kim simply talks about what will be achieved but leaves out how to get thereTake the following paragraph, for example (my emphasis added):

The Cabinet and other state and economic organs should decisively improve their economic planning and guidance. Leading economic officials should fully equip themselves with Party policy, work out plans of the economic work in an innovative way and give a strong push to it on the principle of developing all the sectors at an exponential speed by relying on the inexhaustible creative strength of the working people and by dint of modern science and technology. They should accurately identify the main link in the whole chain of economic development and concentrate efforts on it while revitalizing the overall economy, especially when the conditions are not favourable and many difficulties arise. They should be proactive in organizing and launching the work of establishing on a full scale our style of economic management method which embodies the Juche idea, thus giving full play to its advantages and vitality.

And:

All the sectors of the national economy should set ambitious goals and maintain regular production by tapping every possible internal reserve and potentiality.

Those who are more savvy at reading between the lines and interpreting rhetorical symbolisms can perhaps draw out meaningful signals from quotes such as these. But at face-value, they seem to give little indication of policy changes. Or of any policy at all, for that matter.

What are the areas that Kim hold up as economic priorities, then? Stephan Haggard points out heavy industry as one such theme. It is also the one mentioned first in the speech. Infrastructure and power supply also features fairly prominently (and is mentioned early on), with specific references to several power station construction projects. Kim also mentions IT and the “knowledge-driven economy” (emphasis added):

Our working class, scientists and technicians, true to the instructions of the great leaders, made a big stride in making the metallurgical industry Juche-based, built model, standard factories of the era of the knowledge-driven economy in various parts of the country and put production lines on a modern and IT footing, thus opening a new road of advance for developing the overall economy and improving the people’s standard of living.

Presumably, this is what North Korean media mean when they talk about the H-bomb test as an economic boost: that such capabilities show North Korea’s strength as a knowledge-based economy.

Domestic production capabilities are highlighted all the way through. This theme isn’t new. Kim Jong-un has often emphasized the importance of goods diversity and local production. This lies well in line with the basic economic tenets of the Juche doctrine. Here is one example of how domestic production capacity is highlighted in the speech (emphasis added):

The flames of the campaign to implement the Party’s ideas and defend its policies have unfolded a proud reality of our indigenous plane flying in the sky and our indigenous subway train running under the ground, and rich fish and fruit harvests were gathered, their socialist flavour bringing pleasure to the people.

One theme that features relatively prominently is construction. In one paragraph, Kim even states that “Construction is a yardstick and visual evidence for the strength of a country and the quality of its civilization”, and continues to urge the country to build more:

The construction sector should launch a general offensive to implement the Party’s construction policy and grand plan. By doing so, it should build important production facilities, educational and cultural institutions and dwelling houses on the highest possible level and at the fastest possible speed, so that they serve as standards and models of the times. In this way it can make sure that the great heyday of construction continues without letup.

Perhaps this is an indication that the building boom in Pyongyang of the past few years will continue. Priorities such as this one primarily benefit those political classes that live in Pyongyang. With few exceptions, as far as I’m aware, most other cities have seen little of the construction boom that the capital city has experienced.

There is also a reference to the coal mining industry. On the one hand, it may be interesting because North Korea’s main export destination for coal is China, and these trade flows have been volatile over the years, and there have been signs that North Korea isn’t getting a good deal in this trade. But on the other hand, this may be reading too much into one small reference in the speech (emphasis added):

In order to achieve breakthroughs for a turning point in building an economic giant the electric-power, coal-mining and metallurgical industries and the rail transport sector should advance dynamically in the vanguard of the general offensive.

Later, coal mining appears only in reference to the domestic power supply (emphasis added):

All sectors and all units should wage a vigorous campaign to economize on electricity and make effective use of it. The sector of coal-mining industry should raise the fierce flames of an upsurge in production to ensure enough supply of coal for the thermal power stations and several sectors of the national economy.

There are two themes that are surprisingly absent. One is agriculture. Agricultural policy is barely present, and when it is, management methods aren’t mentioned. For example:

The agricultural sector should actively adopt superior strains and scientific farming methods, speed up the comprehensive mechanization of the rural economy and take strict measures for each farming process, so as to carry out the cereals production plan without fail.

This is a little surprising, because regime sources have claimed that agricultural production has been boosted during the year, and management reforms with greater incentives for farmers have been touted as the reason. (A close look at the numbers indicates that agricultural production has declined slightly during 2015, moving it towards the average of the 2000s.) If agricultural reforms have indeed been a central tenet of Kim Jong-un’s economic policies, one could at least have expected a reference to these reforms in the speech.

The second theme that is strangely absent is forestry policy. It is only mentioned in one sentence:

The whole Party, the entire army and all the people should buckle down to the campaign to restore the forests of the country.

During the past year, Kim Jong-un has highlighted forestry policy as a key area. He has talked openly and frankly about the role of tree felling in causing floods and subsequent food shortages, and promoted reforestation, albeit not in a way that is likely to work very well. North Korean media has singled out tree nurseries for not doing their job properly. In sum, forestry has been relatively high on the agenda, but the topic still barely made it into the speech.

All in all, from an economic policy standpoint, this year’s New Year’s Address did not contain any major bombshells. The fact that economic issues appear right after the section on the upcoming party congress may be a hint that such issues will be high on the agenda, but then again, it might not mean much at all. Moreover, it is unclear how much can really read into the New Year’s Address for hints about regime policies and priorities. After all, the speech contained virtually no allusions to the H-bomb test that was to come only days later.

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