Unofficial and official exchange rates in North Korea: how big is the gap?

February 4th, 2016

By Benjamin Katzeff Silberstein

Photographer Jaka Parker, who lives in Pyongyang and runs a highly popular Instagram page with everyday life pictures from Pyongyang, recently photographed a table showing the official exchange rates of the North Korean won to several major currencies, including the US dollar and Chinese yuan. Mr. Parker has been kind enough to allow North Korean Economy Watch to publish his photographed table, seen here below:

Official exchange rates of the Foreign Trade Bank of the DPRK. Photo credits: Jaka Parker.

Official exchange rates of the Foreign Trade Bank of the DPRK, January 28th. Photo credits: Jaka Parker.

It is interesting to note how these rates compare to unofficial market exchange rates gathered by Daily NK. Their latest data covers the period of January 7th-13th, so these two sets of figures may not be fully comparable. However, they at the very least give an interesting indication of the difference between the official and unofficial rates. Below are the $1-prices at unofficial market rates given in Pyongyang, Sinuiju and Hyesan according to the latest available information (in North Korean won):

  • Pyongyang: 8190
  • Sinuiju: 8260
  • Hyesan: 8190

As Mr. Parker’s picture shows, the $1-price at the unofficial rate (in Pyongyang) was 109.60 won on January 28th. This would suggest that the unofficial USD-rate is roughly 80 times higher than the official one.

Compared with data from 2011, the discrepancy between the official and unofficial rates is significantly larger today. In 2011, the unofficial rate was $1 = 3,000 won, and the official one at $1 = 100 won. Since then, the unofficial won-rate has depreciated significantly against the dollar. (which has essentially flattened out since 2013: see graph below, based on price data from Daily NK and put together by the present author). In other words, while unofficial rates have soared, the official USD-to-won-rate has essentially stayed the same.

Inofficial market exchange rates over time, Won for USD. Data source: DailyNK. Graph created by Benjamin Katzeff Silberstein.

Unofficial market exchange rates over time, Won for USD. Data source: DailyNK. Graph created by Benjamin Katzeff Silberstein.

That’s a snapshot of late January. However, Mr. Parker has also generously allowed me to publish other pictures he has taken of exchange rate tables at institutions in Pyongyang. Below is a quick look at a few exchange rate figures from last year, with rough comparisons to the corresponding black market exchange rates (all figures for the unofficial market come from Daily NK and I include the rate in Pyongyang only). Note how smaller currencies like the Swedish krona (SEK) can be exchanged by North Korean institutions.

January 8th, 2015: USD selling at 109.520 won at the Foreign Trade Bank. Closest available unofficial data puts the USD at 8190 won – same as above.

North Korean won exchange rates as of January 8th, 2016. Photo: Jaka Parker.

North Korean won exchange rates as of January 8th, 2016. Photo: Jaka Parker.

November 24th, 2015: $1 for 111.050. Black market rate: 8600 won.

North Korean won exchange rates as of November 24th, 2015. Photo: Jaka Parker.

North Korean won exchange rates as of November 24th, 2015. Photo: Jaka Parker.

November 9th, 2015: $1 selling at 110.57 won. The closest available unofficial rate was recorded between October 21st-27th: $1 for 8600 won.

North Korean won exchange rates as of November 9th, 2015. Photo: Jaka Parker.

North Korean won exchange rates as of November 9th, 2015. Photo: Jaka Parker.

October 29th, 2015: $1 for 109.550 won. Closest available black market rate: 8600 won.

North Korean won exchange rates as of October 29th, 2015. Photo: Jaka Parker.

North Korean won exchange rates as of October 29th, 2015. Photo: Jaka Parker.

September 28, 2015: $1 for 108.29 won. Closest available black market rate: 8260 won.

North Korean won exchange rates as of September 28th, 2015. Photo: Jaka Parker.

North Korean won exchange rates as of September 28th, 2015. Photo: Jaka Parker.

One clearly visible trend is that both the official and unofficial exchange rates steadily climb throughout the fall, but decline in January. It’ll be interesting to continue following them over the course of the year.

 

 

 

 

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Labour regulations in EDZ modified

February 3rd, 2016

According to the Pyongyang Times (2016-2-3):

The DPRK has modified its labour regulations for the economic development zones, which were worked out according to a decision of the Presidium of the Supreme People’s Assembly on December 12 2013.

According to them, a foreign investment business is encouraged to employ local manpower as much as possible but it may hire foreign management staff, specialists and technicians.

The fixed monthly minimum wage is set by the central agency for the special economic zones guidance in consultation with relevant provincial-level people’s committees and EDZ management agencies.

An employee is supposed to work 8 hours a day or 48 hours a week on average.

A business shall make sure that employees take rests on local holidays and Sundays.

The forms of payment to the employees involve wage, incentives and bonuses.

According to the quality and amount of work, payment should be done correctly and employees who have carried out the same amount of work are to be paid evenly on an equal footing irrespective of gender and age.

The monthly wage is up to a business. In this case, it cannot be set lower than the fixed minimum wage.

While making preparations to start operation, a business may set the salary for employees, apprentices and unskilled hands within the scope of over 70 per cent of the fixed minimum wage.

A business shall pay for its employees’ regular and supplementary leaves in accordance with the number of their days off.

Female staff on maternity leave shall be paid over 60 per cent of the leave allowances.

If a business works an employee while on leave, it shall pay him or her the equivalent of 100 per cent of the wage per day or hour, as well as their leave allowances.

A business shall give supplementary living allowances that account for over 60 per cent of their wages per day or hour to those who are under training or out of work due to the management.

When it works an employee late at night or overtime, the business shall pay him or her 150 per cent of the wage per day or hour.

If the work is done overtime late at night, 200 per cent of the wage per day or hour shall be given to the worker.

If a business works an employee on holidays or Sundays without compensatory days off, it should pay 200 per cent of the wage per day or hour.

The wage is given in cash, and the bonuses and incentives may be paid in the form of notes or goods.

The DPRK citizens and their families in the EDZ are to benefit from the social and cultural policies of the government, namely free education and medical service, social insurance and social security.

If any breach causes damages to the lives, health and properties of a business or employee, it shall be restored to their original state or compensated duly for the damages.

By Cha Myong Chol PT

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UN releases emergency funds to North Korea

February 2nd, 2016

By Benjamin Katzeff Silberstein 

From a press statement today by the United Nations Office for the Coordination of Humanitarian Affairs (OCHA):

UN EMERGENCY FUND RELEASES US$ 8 MILLION TO ASSIST MOST VULNERABLE WOMEN AND CHILDREN IN DPRK

(Bangkok, 2 February 2016)

United Nations Secretary-General Ban Ki-moon on 29 January 2016 released US$ 8 million from the UN Central Emergency Response Fund (CERF) for severely underfunded aid operations in the People’s Democratic Republic of Korea (DPRK). These funds will enable life-saving assistance for more than 2.2 million people most vulnerable and at risk of malnutrition.

The DPRK was one of nine countries to receive such grants within the overall $100 million allocation to underfunded emergencies. Undernutrition is a fundamental cause of maternal and child death and disease: in DPRK, chronic malnutrition (stunting) among under-five children is at 27.9 per cent, while 4 per cent of under-five children are acutely malnourished (wasting).

Around 70 per cent of the population, or 18 million people, are considered food insecure. Food production in the country is hampered by a lack of agricultural inputs and is highly vulnerable to shocks, particularly natural disasters. Due to drought in 2015, 11 per cent of the main harvest was lost.

Health service delivery, including reproductive health, remains inadequate, with many areas of the country not equipped with the facilities, equipment or medicines to meet people’s basic health needs. Under-five children and low-birth-weight newborns are vulnerable to life-threatening diseases, such as pneumonia and diarrhoea if they do not receive proper treatment or basic food, vitamins and micronutrients.

Full press statement available here.

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DPRK – China trade contracts in 2015, but inter-Korean trade increases

February 1st, 2016

DPRK – China trade is down. According to Yonhap:

North Korea’s trade with China dipped nearly 15 percent last year apparently due to a chilly bilateral relationship between the two neighboring countries, a report showed Sunday.

The North-China trade volume reached US$4.9 billion in the January-November period, down 14.8 percent from $5.76 billion a year earlier, marking the first double-digit on-year drop since 2000, according to a report by state-run think tank Korea Development Institute (KDI).

Pyongyang’s shipments to its neighbor sank 12.3 percent to $2.28 billion over the cited period, while imports from China plunged 16.8 percent to $2.63 billion.

The trade between the allies has risen an average of 22.4 percent between 2000 and 2014. Only in 2009 and 2014 did it shrink on-year.

The KDI report attributed the sharp decline to sluggish raw material exports, as shipments of anthracite coal and iron ore fell 6.3 percent and 68.5 percent, respectively.

“The chilly relationship between Pyongyang and Beijing and a slowdown in the Chinese economy seemed to affect North Korea’s sluggish trade with China,” said the report. “North Korean leader Kim Jong-un’s New Year message, which called for using home-made products and rejecting foreign-made ones, also had some influence on the downbeat trend.”

The alliance between Pyongyang and Beijing had been described as being “forged in blood,” since China fought alongside North Korea in the 1950-53 Korean War. China is the only country that provides crude oil to the reclusive North.

But their political relations have become strained since 2013, partly because of the North’s defiant pursuit of nuclear weapons and a series of purges of pro-Chinese officials in North Korea.

For 2016, the KDI report noted that there is a higher possibility that bilateral trade will contract further following Pyongyang’s nuclear tests on Jan. 6, as the global community including the United Nations is set to impose sanctions against the reclusive regime.

“North Korean trade will be dragged down by international economic sanctions sparked by the North’s latest nuclear test in the first half of this year,” the KDI said. ” North Korea-China trade has shrank to some extent, following sanctions by the U.N.”

Output at the Kaesong Industrial Complex is up in 2015. According to the Yonhap (via Korea Herald):

Production of companies at the inter-Korean industrial complex in North Korea exceeded $500 million last year for the first time since its opening in 2004, the government said Sunday.

According to the Unification Ministry, a total of 124 South Korean factories operating in the complex produced $515.49 million worth of goods in the first 11 months of last year, up more than 20 percent from the previous year and the highest yearly output even excluding the December tally.

The figure for the entire year is estimated to reach $560 million, given that their monthly production averaged around $50 million in the year, it said.

“The Gaeseong Industrial Complex managed to grow stably, recording more than a 20 percent increase in total output despite North Korea’s shelling in August across the border and various other incidents in and out of the country,” a ministry official said.

There were 54,763 North Korean workers and 803 South Korean managers at the factories in the industrial park located in the North’s border city of Gaeseong as of November.

Here is additional information in the JoongAng Ilbo.

Read the full story here:
N Korea’s trade with China contracts in 2015
Yonhap
Kim Boram
2016-1-31

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Insurance products promoted to target foreign investment enterprises

January 26th, 2016

Institute for Far Eastern Studies (IFES)

North Korea is promoting insurance products targeted at foreign-investment companies with increasing efforts to attract foreign capital through special economic zones.

On January 19, 2016, the state-run Korea National Insurance Corporation (KNIC) made an official announcement on its website on new insurance products for the economic development zones. It announced that KNIC is promoting various insurance products to protect life and property for foreign investment companies, including fire insurance and accident liability insurance for gas accidents, third party automobile liability insurance, and third party construction liability insurance.

In addition, KNIC announced that it will offer a variety of insurance products according to personal and business demands. The website elaborated, “in order to meet the growing insurance need in the economic development zones, KNIC is introducing development of various insurance products and to realize the international insurance trends and the diversification of the insurance sector to ensure the prompt insurance coverage to remain as credible institution among foreign companies.”

The KNIC first began to operate fire, automobile, gas accident liability insurances to tenant companies in the Kaesong Industrial Complex from 2005.

Meanwhile, North Korea’s Presidium of the Supreme People’s Assembly (SPA) adopted the insurance regulation along with property regulation for the Economic Development Zone (EDZ) last July. The insurance regulation consisted of four chapters and 52 articles, but specific details were not disclosed. However, details on insurance contracts, insurance offices, as well as installation and operation of the insurance office were revealed.

Previously, North Korea enacted new EDZ laws in May 29, 2013 which guaranteed special privileges for economic activities conducted in special economic zones as specified in the law. On November 6, 2013, three EDZ Operational Regulations were adopted (management institutional regulations, establishment regulations, and business establishment and operational regulations) by the Presidium of the SPA.

This new property insurance policies and regulations appear as a new measure to ensure added legal protection to improve investment environment of foreign capital from the three existing operating regulations.

In February 2015, Ri Sun Hak, department director of the Ministry of External Economic Relations, stated in an interview with the KCNA, “Our country is fully equipped with the legal environment to protect the legitimate rights and interests of investors.” The news also depicted ‘foreign investment law,’ ‘economic development law,’ and ‘external economic arbitration law’ were newly enacted or revised. The foreign investment laws was revised to streamline investment formalities and to provide various services for foreign-investment companies.

However, the question still remains as to gauge the effectiveness of North Korea’s insurance operations. As the international community, including the UN Security Council, is likely to impose stronger sanctions to condemn North Korea’s fourth nuclear test, the solvency of North Korea’s insurance companies remains uncertain and unreliable.

In addition, the KNIC’s Germany branch and President So Tong Myong (Seo Dong-Myung) are both on the EU’s list of sanctions, which is likely to act as an impeding factor for smooth insurance operations. The EU listed six KNIC senior employees to the sanctions list subject to an EU-wide asset freeze and travel ban.

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Ryugyong Commercial Bank

January 26th, 2016

Ryugyong-commerical-bank-ATM

Pictured Above (Tongil News): The new Ryugyong Commercial Bank ATM in the Changgwang Inn

UPDATE (2016-2-1): I stumbled on an article from last year the mentions the Ryugyong Commercial Bank. Apparently they have a pre-pay card as well. According to Reuters:

Foreign investors can also set up banks in North Korea and are allowed to lend money and provide credit-based financing schemes to North Korean companies, according to a bilingual book of North Korean law available to foreign investors.

Ryugyong Commercial Bank, for instance, offers shopping discounts as well as gold or silver card options for its customers. As with the Narae card, customers are encouraged to top up their accounts with dollars.

ORIGINAL POST (2016-1-26): Tongil News reports:

Pyongyang, the capital city in North Korea, installed an ATM (automated teller machine) so that people can deposit and withdraw foreign exchange.

A foreigner staying in Pyongyang uploaded a picture of the machine to Instagram three weeks ago with the comment, “I saw an ATM inside of Changgwang Inn near Koryo Hotel for the first time in North Korea”.

The large-screen ATM is operated by the Ryugyong Commercial Bank  (류경상업은행). In Chinese it is called 柳商銀行, which translates to Ryusang Bank (류상은행). Although neither name is generally known, they are appeared to be a joint (cooperative) bank with partners in North Korea and China.

According to this foreigner’s post, the machine allows people to withdrawl various foreign currencies, but not North Korean won. Most users of this ATM tend to draw from accounts abroad.

Some netizens reacted to this post with comments such as “Oh my god, I cannot believe that Pyongyang changed this much.”

“This is the first case that an ATM is found in North Korea,” Professor Im Ul-chul at Kyoungnam University’s Institute for Far Eastern Studies said. “China actually asked North Korea for some help transferring funds for those who travel in North Korea, and it has apparently been realized.”

“It must be a measure for meeting demands of tourists in the country even though it is limited, but it could be improve the quality of banking and finance services inside of North Korea if these types of projects are expanded,” Professor Im told.

“It was observed that Chinese now can use their check cards in North Korea,” a North Korean Tourism specialist pointed out, “the Chinese yuan and the U.S. dollar will grow to dominate North Korea’s society soon.”

This foreigner also introduced the Kwangbok Commercial District (광복상업지구) “loyalty card” and explained “I can get points using this card and purchase goods with those points.” Additionally he mentioned that this card is quite similar to the “Narae” cash card, but it is only used in the Kwangbok Commercial District.

He also replied to another netizen’s question, saying that North Korea sells imported goods in hard currency shops, but there is no case of selling them in its national (state) shops.

Meanwhile, a number of photos featuring North Korea’s official exchange rate and street scenes in Pyongyang on Instagram have been constantly updated. These photos change the past image of closed society.

And in the event that you don’t trust the work of my handy translator, here is the original Korean:

북한의 수도 평양에도 ATM(automated teller machine, 현금 자동 입출금기)이 설치돼 외환을 입출금할 수 있는 것으로 확인됐다.

평양에 주재하고 있는 한 외국인은 3주 전 SNS(사회관계망) ‘인스타그램’에 “고려호텔 인근 창광 숙소에서 처음으로 ATM을 보았다”며 사진을 함께 게재했다.

ATM은 한자로는 ‘류상은행(柳商銀行)’, 영자로는 ‘류경상업은행(Ryugyong Commercial Bank)’이 운용하는 것으로 돼 있으며, 큰 화면을 제공하고 있다. ‘류상은행’이나 ‘류경상업은행’은 알려져 있지 않지만, 류경이 평양의 옛이름인 점으로 미루어 보아 북중 합작은행일 가능성이 높아 보인다.

이 외국인은 북한 원화를 제외한 다양한 외화를 교환할 수 있고, 대부분 이용자들은 해외로부터 송금을 받는 용도로 사용한다고 밝혔다.

이 포스팅에는 “이럴 수가, 평양이 엄청 변하고 있네요. 믿을 수가 없군요”라는 댓글이 달리기도 했다.

임을출 경남대 극동문제연구소 교수는 “북한에 ATM이 등장했다는 것은 처음 접한다”며 “지난해부터 중국 측에서 북한 여행객들을 위한 송금 편의를 북측에 요구한 것으로 아는데, 이것이 실현된 것으로 보인다”고 말했다.

임 교수는 “제한적이기는 하지만 늘어나는 관광객 수요에 부응하기 위한 조치로 받아들여지고, 이러한 추세가 확대되면 북한 내에서의 금융 서비스의 질을 높일 계기가 될 수 있는 새로운 변화”라고 평가했다.

한 북한관광 전문가는 “중국인들이 주로 사용하는 현금(체크)카드를 북한에서도 쓸 수 있게 된 것으로 관측된다”며 “북한에서 달러화와 함께 위안화의 지배력이 커져 갈 것으로 예상된다”고 짚었다.

이 외국인은 다른 포스팅에서 ‘광복상업지구’ 회원카드(loyalty card) 사진을 게시하고 “포인트를 모을 수 있고 포인트로 구매도 가능하다”고 소개했다. 아울러 이 카드는 북한에서 통용되고 있는 ‘나래’ 현금카드와도 유사하지만 광복상업지구에서만 통용된다고 덧붙였다.

또한 다른 유저의 질문에 북한에서 상품 홍보를 위해 수입상품 등을 할인판매도 하지만 국영상점에서는 할인하는 경우가 없다고 전했다.

한편, 인스타그램 등 SNS 상에는 북한의 환율과 평양 풍경 등이 거의 실시간으로 올라오고 있어, 폐쇄된 북한의 이미지도 과거에 묻히게 됐다.

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North Korea considers nuclear test a driving force of economic development

January 21st, 2016

Institute for Far Eastern Studies (IFES)

Following North Korea’s self-proclaimed hydrogen bomb test on January 6, 2016, which highlighted the fact that North Korea is a nuclear-armed state, daily mass rallies have been held in order to stimulate economic development and cement national unity. The Korean Worker’s Party (KWP) mouthpiece Rodong Sinmun proudly announced on January 8th that the fourth nuclear test had been a ‘success’. It has been reported that mass rallies were held in North Phyongan Province, Jagang Province, Kangwon Province, North Hamgyong Province, Ryanggang Province, Rason City, and other regions as part of the effort to continue building a strong and prosperous nation.

Each of these mass rallies included discussions on how to develop the economy so as to “achieve a golden age through the building of a strong and prosperous nation.” The purpose behind these daily mass rallies can be interpreted as both taking advantage of the opportunity provided by the nuclear test to strengthen solidarity of the people while also paving the way to maximize economic productivity ahead of the upcoming 7th Party Congress that is scheduled for May.

In fact, the North Korean media is asserting that the recent nuclear test was a measure to deter war in order to bring about a domestic economic revival. A front page editorial in the Rodong Sinmun encouraged the nation, saying “We will go full-speed ahead to raise North Korea’s human dignity, vigor, and glory, which are already well-known in the international community. With the success of our hydrogen bomb test as the main driving force, we will show off the mighty power of our nation, and we must aggressively take on the struggle of improving the lives of the people and building an economically strong nation.”

The Chosun Sinbo, which is the mouthpiece of Chongryon (the General Association of Korean Residents in Japan) serving as the representative for North Korea in Japan, emphasized that, “We must have a powerful deterrent to endless warfare in order to have a peaceful environment that will enable us to build up our economy. Focusing all of our efforts on building an economically powerful nation and creating a new paradigm shift in which to develop our economy and improve the lives of the people is the most important task of this year.”

Meanwhile, North Korea’s propaganda outlets are stating that food processing plants and other sectors are producing a flood of globally competitive products. North Korea’s propaganda website aimed at the outside world (Chosun Today) stated on January 7th that “Recently, many North Korean food processing plants have been modernizing their manufacturing processes to produce foodstuffs that meet global quality standards, actively contributing to the improvement of the living standards of the Korean people.”

The Sonhung Food Processing Plant was introduced as a model case example. According to North Korean media, the foods produced at this plant are all globally competitive goods, and the best products of the country. Although the plant has only been in operation for 10 years, the media claims that current annual net operating profits per employee are a staggering 350 times higher than those of their first year of operation, and the plant is known for this remarkable record-setting achievement.

These formidable efforts also encompass the development of approximately 90 health products with high nutritional value over the past four years, including healthy danmuk. The news outlets also boasted that nine North Korean factories have received ISO 22000 (food safety management system) certifications.

In addition, 60 products were registered as ‘February 2nd products’, and not long ago five food products, including fruit bread, coffee sweetener, and healthy danmuk, received ‘December 15th quality medals’.

Supreme Leader Kim Jong Un’s New Year’s Address emphasized “improving the lives of the people” and encouraged various factories to achieve success. The propagation of these successes through the North Korean media outlets demonstrates Kim Jong Un’s intentions of inspiring loyalty from the people through intensive efforts to increase the quality of their diets.

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North Korea’s nuclear test and trade with China: no discernable impacts so far

January 19th, 2016

By Benjamin Katzeff Silberstein

North Korea’s nuclear tests aren’t usually met with any drastic economic measures from China. So far, the supposed-but-not-really-hydrogen bomb test hasn’t been an exception. According to a piece in Asia Times Online, traders in Dandong have barely noticed any impacts from the latest test. Though fewer North Korean traders appear to be present in Dandong, nothing seems to be greatly out of the ordinary:

According to Initium reporters,  two-way trade in Dandong,  a prefecture-level city China’s  southeastern Liaoning province that sits astride the Chinese-North Korean border, hasn’t been affected. Merchants in the key trade hub told Initium that fewer North Korean merchants had been seen in Dandong recently, but they said this could be tied to a change in procedures with the possibility of a rebound in trade in February.

The piece also contains a look back at what’s happened (and not happened) after North Korea’s previous nuclear tests, though I suspect that isolating the specific causes for any changes in trade is next to impossible:

The North’s second nuke test in 2009 had the gravest impact on bilateral trade. The trade volume decreased by 8.9%. In October of that same year, then Chinese Premier Wen Jiabao visited the North and crafted a set of bilateral cooperation agreements, including the development of special border zones and the construction of the new cross-border Dandong-Yalu River bridge. These efforts led to the best 2 years for the China-DPRK relationships since the end of the Cold War, with then DPRK leader Kim Jong-il visiting China twice. Trade also surged.

After Kim Jong-il’s death in December 2011, bilateral trade lost some steam. But overall volume remained stable. Good times returned and continued until 2013, when the trade volume between the two countries reached $6.545 billion, which was 77% of the DPRK’s total foreign trade.

Read the full article here:

Weighing data: Will North Korea’s nuke test impact trade with China? 
Qin Xuan
Intium Media (and Asia Times Online)
2016-01-18

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Slogans on ‘self-development-first’ principle emulate Kim Il Sung era slogans

January 18th, 2016

Institute for Far Eastern Studies (IFES)

From early on, Kim Jong Un has attempted to strengthen his political power through emulating his grandfather, Kim Il Sung. Recently political slogans from Kim Il Sung era are reappearing.

North Korea’s propaganda website Uriminzokkirir (based in China) claimed in an article entitled “Great Victory Based on Self-Development-First Principle” (posted on January 12) that “the revolutionary spirit of self-reliance through the revolutionary historical course has sublimated into powerful policy of self-development-first principle of today that produced miraculous and dazzling reality surprising the entire world.”

In his New Year speech, Kim Jong Un used the expression “self-development-first principle” for the first time. This slogan is reminiscent of the Kim Il Sung era slogan “self-reliance.”

According to Tongil Sinbo, North Korea’s state-run weekly publication based in Japan, “self-development (jagangryok) refers to the power to empower oneself through his own strength,” and added, “the great Kim Il Sung has created our republic to be a model nation, recognized as a powerful state of self-reliance.”

Kim Jong Un’s new year’s speech emphasized the spirit of ‘self-development-first policy’: “The principle of giving priority to self-development should be maintained in building a thriving socialist country. Worship of big countries and dependence on foreign forces is the road to national ruin; self-development alone is the road to sustaining the dignity of our country and our nation and to paving a broad avenue for the revolution and construction. With affection, trust, dignity and pride in everything of our own, we should achieve the great cause of building a thriving nation and realize the people’s beautiful dreams and ideals without fail by our own efforts, technology and resources.”

Kim Il Sung, in his lifetime coined the term “jaryokgaengsaeng” or “self-reliance” to signify “self-reliance in economy” and stressed that “to build an independent national economy signifies the creation of a nation that can live on its own, a self-sufficient nation.” Kim Il Sung’s “jaryokgaengsaeng” (“self-reliance”) and Kim Jong Un’s “jagangryok” (“self-development first”) are in essence parallel terms.

Since taking the helm of leadership, Kim Jong Un has emulated the appearance of his grandfather Kim Il Sung, including his gait, clothing, and style, in order to draw loyalty from his people.

Not surprisingly, North Korean media has used the term “self-development-first principle” on a daily basis since it was first iterated in Kim Jong Un’s new year’s speech.

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

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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