North Korean Economy Watch

According to Reuters:

There are no private cars in North Korea and countless factory chimneys have not belched smoke in years, but state media said on Tuesday scientists were inventing new ways to cut air pollution and protect the environment.

The country “has directed a great effort” to research environmental protection, the state news agency KCNA reported.

“Researchers have developed a new material for removing exhaust fumes from automobiles so as to cut the greenhouse gas emissions and reduce air pollution 35-40 percent,” it said, without elaborating.

It also said “units” in the capital, Pyongyang, that caused pollution had been registered, suggesting that dirty industries were under pressure to get clean.

“They are now developing a gas and dust arrester necessary in production processes and new materials needed to secure environmental safety of products,” it said.

The isolated communist country’s state-run media periodically boasts revolutionary innovations in science and technology, despite a moribund economy and chronic food shortages.

Perhaps the most visible in recent years have been related to the relatively well-funded — and well-fed — military. North Korea has conducted two nuclear tests since 2006 and several missile launches, upsetting its neighbours.

North Korean scientists also invented a device using “locally available materials” to incinerate hospital waste, KCNA said, and the Environmental Protection Institute of the Ministry of Land and Environmental Conservation had intensified research into pollution-free vegetable production.

Here is the original KCNA story:

Scientific Achievements of Environmental Protection
 
Pyongyang, June 22 (KCNA) — The Democratic People’s Republic of Korea has directed a great effort to scientific researches for environmental protection.

Researchers have developed a new material for removing exhaust fumes from automobiles so as to cut the greenhouse gas emissions and reduce air pollution 35-40 percent.

They have also put the environmental management of industrial establishments on IT basis.

Meanwhile, they have registered units causing environmental pollution in Pyongyang and confirmed methods and procedures for preventing pollution. They are now developing a gas and dust arrester necessary in production processes and new materials needed to secure environmental safety of products.

Besides, they have invented a new device to destroy by fire such wastes from hospitals as contaminated injector and bandage with locally available materials.

Scientists of the Environmental Protection Institute of the Ministry of Land and Environmental Conservation have intensified a research in pollution-free vegetable production.

Read the full Reuters story here:
N.Korea says puts “great effort” into environment
Reuters
6/22/2010

Institute for Far Eastern Studies (IFES)
NK Brief No. 10-06-17-1
6/17/2010
 
As North Korea’s food shortages worsen and reports of starvation continue to grow, the Workers’ Party of Korea have acknowledged the failure of the central food ration program. Since the end of May, the Party has permitted the operation of 24-hour markets, and the regime has ordered the people of the North to provide for themselves.

The human rights organization Good Friends reported this move on June 14. According to Good Friends, the Workers’ Party organization and guidance bureau handed down an order on May 26 titled ‘Relating to Korea’s Current Food Situation’ that allowed markets to stay open and ordered North Koreans to purchase their own food. This order, recognizing that the food shortages in the North have continued to worsen over the last six months, since the failed attempts at currency reform, acknowledged the difficulty of providing government food rations. It calls on those who were receiving rations to now feed themselves, while also calling on the Party, Cabinet, security forces and other relevant government agencies to come up with necessary countermeasures. Now, authorities officially allow the 24-hour operation of markets, something that most had already tacitly permitted, and encourage individuals, even those not working in trading companies, to actively import goods from China.

It has been reported that government food rations to all regions and all classes of society, even to those in Pyongyang, were suspended in April. The last distribution of food was a 20-day supply provided to each North Korean on April 15, the anniversary of the birth of Kim Il Sung. Because of the difficulty of travelling to markets, the suspension of rations caused many in farming communities to starve to death. When Kim Jong Il’s recent visit to China failed to secure expected food aid, the Workers’ Party had no choice but to hand down the ‘May 26 Party Decree’. While the suspension of rations has considerably extended the economic independence of North Korean people, the regime has significantly stepped up other forms of control over society. Public security officers have begun confiscating knives, saws and other potential weapons over 9 centimeters long in an effort to stem murder and other violent crimes. Additionally, state security officials are cracking down on forcefully resettling some residents of the age most likely to defect, while sending to prison those thought to have contacted relatives in South Korea.

According to Daily NK, North Korean security officials are pushing trading companies to continue trading with China, while calling on Chinese businesses to provide food aid. It also appears that North Korean customs inspections along the Tumen River have been considerably eased, and there is no real attempt to identify the origin or intended use of food imported from China. Sinheung Trading Company has asked Chinese partners investing in the North to send flour, corn and other foodstuffs. The Sinheung Trading Company is operated by the Ministry of State Security, and is responsible for earning the ministry foreign capital. It appears that food acquisition is now a matter of national security, as North Korea is expecting South Korea and the rest of the international community to economically isolate the country.

Institute for Far Eastern Studies (IFES)
NK Brief No. 10-06-14-2
6/14/2010

During the third session of the 12th Supreme People’s Assembly, convened on June 7, Kim Jong Il promoted his brother-in-law Jang Sung Thaek to vice-chairman of the National Defense Commission (NDC), named a new premier, and replaced several department heads and ministers. This appears to be an attempt to shore up the regime as it seeks to “open the door to a strong and prosperous nation” by 2012, the 100th anniversary of the birth of Kim Il Sung. Kim Jong Il made a personal appearance at this latest assembly meeting, unlike the SPA meeting held in April. The leader’s presence hints at the importance of the latest gathering.

This promotion of Jang Sung Thaek and shake up of Cabinet positions appears to be part of efforts to realize the quickly approaching goal of establishing a ‘strong and prosperous nation’ by 2012, assigning those most able to positions of responsibility, regardless of age or experience. Most notably, Jang, widely thought to be second-in-command in North Korea, was promoted to vice-chairman of the NDC. He was first appointed to the NDC at the first meeting of the 12th SPA in April 2009, making his climb to vice-chairman in a mere 14 months.

Before the latest promotion, Jang held the position of vice-director of the Workers’ Party of Korea, a newly created position that he was the first to hold. In this position, Jang oversaw national security offices, police, and the courts, putting him in a position of power difficult for anyone else to achieve. Having traveled to both South Korea and China, Jang Sung Thaek was likely promoted to present the image of a strong military and, at the same time, establish stable relations with the international community in order to ensure a smooth transition of power as well as to resurrect the economy by 2012. When Kim Jong Il led a delegation to China last May, the Chinese government treated Jang very well, ignoring standard protocol for someone in his position.

In addition, Choe Yong Rim was named the North’s new premier, and eight new vice-ministers were appointed. Regional Party secretaries were allowed to participate directly, allowing those who are most knowledgeable of local conditions to impact the decisions of the administration. Most of the new appointments were very experienced elites, including Choe Yong Rim (80) as premier, and Kang Neung Su (80), Kim Rak Hui (77), Ri Thae Nam (70), and Jun Ha Chul (82). The regime is promoting a number of veterans who are making their “last stand for the motherland” as part of the effort to ensure stable transformation of power after Kim Jong Il.

With Kim Rak Hui’s appointment as vice-premier and new appointments to the Ministry of Foodstuff and Daily Necessities Industry as well as the head of the Light Industry Ministry, North Korea seems to be pursuing the improvement of standards of living promised in the 2010 New Year’s joint editorial. Pyongyang Party officials appear to be attempting to reassert a centrally planned economy in the aftermath of botched currency reform efforts; however those witnessing regional economic conditions appear much more able to come up with appropriate economic policies. North Korea has been unable to make any significant progress in resolving its food shortages or its inability to provide daily necessities to the public, leading the regime to scapegoat some high-ranking officials. Now, many in and outside of North Korea are watching closely to see if the regime can launch economic efforts capable of successfully ‘opening the door to a Strong and Prosperous Nation’ in the next two years.

Writing in the Asia Times…

A few days ago, a new session of the Supreme People’s Assembly – North Korea’s rubber-stamp parliament – was convened in Pyongyang. In most cases, such sessions do not attract much attention outside a tiny circle of the full-time Pyongyang watchers: few people would be excited by the sight of monotonously and tastelessly dressed men and women sitting in rows and raising their hands to signal their unanimous approval of the laws and resolutions that – as everybody understands – seldom bear any relation to reality.

However, this time observers suspected that something unusual was going to happen. The assembly’s last session took place in April, and was not supposed to meet again so soon. As we learned on June 7, parliament was convened to authorize (with the expected 100% approval rate) a major reshuffle of the North Korean leadership – and, judging by the urgency of gathering, this reshuffle was seen as a pressing matter.

A few days earlier, on June 3, the official North Korean wire agency reported that one day before, Yi Che-kang, the first deputy chairman of the ruling Korean Workers’ Party, had been killed in a traffic accident. The victim of a car crash was, formally speaking, second only to Dear Leader Kim Jong-il in the party hierarchy.

This news had to be suspicious: North Korea’s traffic is arguably the thinnest in Asia, but the country has a long tradition of traffic incidents taking the lives of high officials. The first such incidents occurred in the early 1970s, during the transition of power from the country’s founding father Kim Il-sung to his son.

Nowadays, the new dynastic transition is unrolling. In early 2009, after long delays and much hesitation, Kim Jong-il decided that his youngest son, Kim Jong-un, would become the next great leader of the country. So far, no reference to the “Young General” has appeared in the open media, but one can come across accolades to his greatness and superhuman wisdom in classified materials that are published for the benefit of officials (and distributed widely).

The events of the past week allow us to surmise how the power structure of North Korea will look like in the first years after Kim Jong-il’s death. It seems that North Korean political heavyweights have finally begun to prepare for the unthinkable – the demise of the Dear Leader.

The choice of Kim Jong-un as a heir designate serves, above all, the interests of the North Korean elite, so one can even suspect that the choice was somehow pushed on Kim Jong-il by his entourage. The “Young General” really is young, being merely 27 or 28 years old. Even North Korean propaganda mongers find this embarrassing, so they insist General Kim is in his early 30s.

The choice of such an exceptionally young candidate serves, above all, the interests of the old guard, Kim Jong-il’s own entourage. A young crown prince has no power base and no allies. Thus, even if he technically becomes the supreme leader, he will have no choice but to follow the advice of his father’s entourage, that is, people who are running the country now. He is doomed to become a puppet – at least for some while.

However, a weak crown prince will require an able prince regent. For the past few years, most Pyongyang watchers agreed that the most likely candidate to take such a position is Jang Song-taek, a brother-in-law of Kim Jong-il.

Born in 1946, he is 64 and hence young by the standards of North Korea, where a majority of the top leaders are in their 70s and 80s. The recent Supreme People’s Assembly session confirmed these speculations. At the session, Jang was appointed vice chairman of the National Defense Commission. The North Korean constitution stipulates that the chairman of this body is head of the state, and Kim Jong-il runs the country exactly in this capacity. Therefore, Jang officially became the second-placed person in the country.

The car incident that killed Yi Che-kang was also timely for Jang Song-taek. Yi was widely believed to be a rival of Jang. Now, with Yi dead, Jang seems to have no serious rivals left. The recent assembly session also appointed a new head of the North Korean cabinet. In North Korea, the prime minister is essentially a top technocrat, but it is still significant that this position went to Choe Yong-rim, who is rumored to be close to Jang.

Jang’s position remains precarious: Kim Jong-il is still the supreme leader, and in North Korea even blood connections with the highest family do not always secure a person from august wrath. In the past, family members have been exiled a number of times, and in one case a young relative of the Dear Leader was assassinated in Seoul, where he had defected. A few years ago, Jang Song-taek disappeared from public sight for a year, and he is widely believed to have spent this time in exile.

At any rate, the North Korean elite – with at least tacit approval of Kim Jong-il – began to work on the architecture of a post-Kim Jong-il regime. It seems that the future power structure will consist of Kim Jong-un, a much extolled Star of Revolution and Shining Comrade (or whichever flowery titles they will invent) who will essentially be a powerless puppet while real authority will dwell with a council of technocrats and generals presided over by Jang Song-taek. In all probability, it means that the death of Kim Jong-il will not bring about much change: for a while the country will be steered by the same people who have been running it for the past two or three decades.

However, power transitions do not always go as intended. To start with, Kim Jong-un’s personality cult is still in its infancy, and it will take few years to develop it to the usual North Korean levels. We are yet to see pages of all newspapers filled with countless stories of the “Young General’s benevolence”. However, before the personality cult is developed enough, not only Kim Jong-un’s position but the entire system will remain insecure. We do not know whether Kim Jong-il and his old guard have enough time at their disposal: at the latest Supreme People’s Assembly session the Dear Leader did not look particularly well.

It is also possible that after Kim Jong-il’s death some cracks in the top leadership, now invisible, will lead to intense infighting and thus undermine the cohesion that is essential for the stability of the system.

And even if the transition goes smoothly enough, the resulting system will remain inherently unstable. Kim Jong-un might be young, inexperienced and compliant now, but he will get stronger and wiser, and in all probability will not be too happy about the control of the old dignitaries. Many young kings ended up challenging and removing their regents.

On the other hand, the likely members of the future regent council are quite old, with an average age of 75 or so, hence in a decade many of the present-day top dignitaries will be dead from natural causes (and, perhaps a car crash or two).

Finally, Jang Song-taek might be tempted into assuming all power for himself. Nasty things are known to have happened to young crown princes in the past – from food poisoning to riding incidents and, perhaps, even good old car crashes.

But, whatever happens, the first days of June saw the contours of post-Kim Jong-il North Korea emerge.

Read the full story below:
Son rising for a post Dear Leader era
Asia Times
Andrei Lankov
6/16/2010

According to the AFP:

North Korea has completely cut off state food rations after China failed to supply the impoverished communist country with extra cereals, a welfare group said Monday.

The ruling communist party announced in a directive on May 26 that there would be no state rations for a while, said South Korea’s Good Friends group which has contacts in the North.

People were authorised to buy food supplies through private markets, it said, adding the directive was due to delayed shipments of food from China.

“The directive was unavoidable” because China failed to send the aid which had been anticipated after leader Kim Jong-Il’s trip to Beijing in early May, group president Pomnyun, who uses just one name, told reporters.

Private markets are now open around the clock across the North, he said.

The North suffered famine in the mid-1990s which killed hundreds of thousands and it still grapples with severe food shortages. The UN children’s fund estimates one third of children are stunted by malnutrition.

The state food distribution system collapsed during the famine. Free markets sprang up and were condoned for a time.

Since 2005 the regime has been reasserting its grip on the economy, with controls or outright bans on the private markets.

A currency revaluation last November, designed to flush out entrepreneurs’ savings, backfired disastrously, fuelling food shortages as market trading dried up and sparking rare outbreaks of unrest.

The North was forced to suspend its campaign to curb the private markets.

Read the full story here:
N.Korea completely cuts off state rations: aid group
AFP
6/14/2010

According to CanKor Report #323, 2 June 2010:

North Korea began opening up to nongovernmental organizations in the 1990s, when severe food shortages forced it to seek outside aid. While both the famine of the mid-90s and the efforts to alleviate it got a good deal of press at the time, attention to this aspect of North Korea has fallen off in recent years as most press coverage now deals with the nuclear issues or questions of leadership succession. But while NGO activities may have dropped off over the last decade, a select few groups continue in their efforts to better the lives of ordinary North Koreans, despite all the limitations and difficulties they face in doing so.

CanKor has collected a partial list of nongovernmental organizations from the non-six-party talk countries currently engaged in humanitarian activities in North Korea. While some have been left out at their own request due to the politically sensitive nature of their work, we will endeavour to present regular updates on current or new projects in the DPRK. Readers are encouraged to write in and inform us of any activities we may report.

Featured Project:  Mennonite Central Committee

MCC has been engaged in the DPRK since the mid 1990s, the earlier years through the Canadian Food Grains Bank (CFGB) in partnership with other organizations to support the Food Aid Liaison Unit (FALU), and also together with other non-resident NGOs such as Caritas International, American Friends Service Committee (AFSC), and Foods Resource Bank/Church of the Brethren Global Foods Crisis Fund to support sustainable agriculture and provide humanitarian assistance. Between 1995 and 2006, approximately $15 million in food and other material resources was sent to the DPRK by MCC.

Since 2006 and the dissolving of FALU, MCC has worked in the DPRK through its MCC NE Asia office. MCC has continued to send food and material resources to orphanages, initially via First Steps, and eventually in direct relationship. Soymilk production equipment was also provided to assist orphanages and soymilk production facilities to increase production of their own nutritional needs. MCC also sends food and material resources to tuberculosis hospitals and rest homes through its partnership with Christian Friends of Korea. Greenhouses have also been provided to enable these facilities to raise more of their own food needs.

Here   is a story on MCC’s partnership with First Steps in sending soybeans to orphanages in the DPRK and

Here   is a story on MCC’s cooperation with Christian Friends of Korea in sending food and other material resources to TB facilities.

Beginning in 2009, MCC is partnering with the Ministry of Agriculture in the DPRK on a three- year food security project. Given the success of conservation agriculture in other climatically-similar districts around the world, including Asia and Canada, this project aims to build longer-term food security at three cooperative farms and surrounding areas by increasing the scale of conservation agriculture practiced on each farm.

This is being done through the provision of technical support, training, specialized equipment and inputs. The program will benefit 12,287 residents on the three project farms. The total budget for the 3-year project is U.S.$1 million, with approximately 75% of the funding provided through CFGB and the remainder through individual donations to MCC. Click here   for a news release about the conservation agriculture project. In the interest of further engagement, MCC has also hosted delegations from the DPRK in both the U.S. and Canada, most recently an agricultural delegation to Canada in the fall of 2008. MCC also looks for ways to advocate DPRK engagement with Canadian and American governments. MCC seeks to share its resources in the name of Christ with those in need, placing emphasis on people-to-people relationships.

CanKor has more on NGOs here.

Institute for Far Eastern Studies (IFES)
NK Brief No. 10-05-19-1
5/19/2010

On November 11, 2009, North Korea enacted a ‘Real Estate Management Law’ consisting of six sub-sections and 47 articles. The new law revised the terms for sale and use of real estate, banning the unapproved rental of property and allowing the state to collect a ‘usage fee’ (rent). In addition to the law on real estate management, immediately after the North’s currency reforms at the end of last November, the government enacted or revised a total of 11 laws related to the economy, including the Food Administration Law, Agricultural Law, Goods Consumption Standards Law, and the Labor Law. This raises the question of whether the regime is strengthening its economic control mechanisms.

According to the Socialist Property Management Law of 1996, only ‘enterprises, institutes, and groups’ were allowed the use of properties, but the latest Real Estate Management Law includes individuals as those allowed to use property.

North Korea’s KCNA reported the enactment of the new law on real estate in the middle of last December, but only revealed that “basic issues of real estate’s registration and inspection, use and collection of rents are regulated,” while the more detailed contents were revealed in a three-part series of articles on the Real Estate Management Law that ran in the Minju Chosun, which was published by the Cabinet and Presidium of the Supreme People’s Assembly between March 17 and April 3.

In North Korea, where all real estate is property of the government, the sale or rent of properties between individuals or groups is, on principle, not possible, but after the July 1, 2002 Economic Management Reform Measure, the regime’s inability to provide housing led to significant growth in the size of the black market for real estate.

On a related note, during the 4th session of the 11th Supreme People’s Assembly, which opened in April 2006, a campaign to assess properties throughout the entire country and establish a system of rent was revealed, after which ‘property usage fees’ were included in the annual national budget.

Ultimately, the enactment of this law on real estate strengthens the state’s control over the socialist economy and over the country as a whole. From South Korea’s perspective, it appears the integrated land tax, property tax and other similar systems are North Korea’s attempt to prepare an important legislative precedent for expansion of the state coffers.

However, the portion of the newly-enacted Real Estate Management Law that really catches the eye is the authorization of ‘individuals’ to rent real estate. While it takes on the form of property leasing, it is also an expanded measure in that it permits individuals to use socialist property. Giving individuals the right to use real estate increases productivity and helps ease the North’s current economic woes.

According to the Minju Chosun, the new law “says one must not buy and sell real estate, and the nature and use of property cannot be changed without permission from the management authorities, so that property cannot be handed over to or lent to other organizations, enterprises, groups or individuals.”

The law also stipulates that a property rents will be paid to a ‘State Pricing Establishment Organization’, and that the intended use for the property must be registered, after which rents will be set in either goods or currency, and if rents are not paid in currency, they can be paid in kind.

In particular, this law stipulates, “Land is not to be abused or used in a way that makes it barren,” and that any historic or revolutionary landmark, or idolation of Kim Il Sung or Kim Jong Il must be thoroughly protected.

Through a special measure by the Cabinet, a National Real Estate Management Committee was established, and management offices and chains of command were established for the cabinet.

According to Yonahp:

North Korea will open its rubber-stamp parliament for the second time in less than two months, a session analysts say is likely to be joined by leader Kim Jong-il who recently returned from a trip to China amid rising tension on the Korean Peninsula.

The communist state’s official media reported Tuesday the Supreme People’s Assembly (SPA) will convene on June 7, exactly a month after Kim returned from his summit meeting with Chinese President Hu Jintao in Beijing.

The last session, which was skipped by Kim, convened on April 9.

The 687-member assembly has not opened twice in one year since 2003. Even then, each session was held by a separate group of representatives, a Unification Ministry official here said.

“The (South Korean) government will closely monitor the upcoming session,” the official said, asking not to be named.

“This should be seen as an extraordinary session at an extraordinary time,” Paik Hak-soon, a North Korea researcher at the Sejong Institute, said. “Kim will likely be present to oversee it.”

Paik was referring to heightened tensions between the divided Koreas since a South Korean warship sank on March 26 near the western sea border with North Korea.

A ranking South Korean defense official said Tuesday investigators have found evidence that points to a North Korean attack on the 1,200-ton Cheonan. Forty-six of the ship’s crew members died when the ship split in half.

“The parliament will also declare its support for economic cooperation projects Kim has brought from China,” Paik said, adding that North Korea fears sanctions on it will tighten if Seoul and Washington conclude Pyongyang is to blame for the ship sinking.

Baek Seung-joo, a researcher from the Korea Institute for Defense Analyses, said Kim is likely to call for support for a power succession that has been secretly underway in Pyongyang.

“This will be much focused on domestic politics,” Baek said, discounting the significance of the meeting between the North Korean and Chinese leaders.

“We may see clear moves that indicate Kim’s third son is rising up the ladder,” he said, adding the ship sinking is unlikely to be a major topic as Pyongyang has already denied any link to the incident.

Pyongyang held its first session of the newly elected SPA last year, reappointing leader Kim Jong-il to another five-year term as head of the National Defense Commission, the highest seat of power.

A member of the 13-man commission was retired earlier this month due to his age, and Baek said that opens up room for a cascade of reshuffles that can help pave the way for a power transfer.

The coming session also comes as North Korea remains reluctant to return to stalled six-party talks on its nuclear weapons programs.

Pyongyang says it will rejoin the aid-for-denuclearization talks only if Washington agrees to launch separate talks toward a peace treaty to formally close the 1950-53 Korean War and the United Nations lifts its sanctions on the country.

The six-nation talks include the two Koreas, the U.S., China, Russia and Japan. Kim pledged to work with China to create “favorable conditions” for their resumption in his summit meeting in China, but Seoul and Washington say it depends on the outcome of the investigation into the ship sinking.

Cho Myung-chul, a North Korea researcher at the Korea Institute for International Economic Policy in Seoul, said the SPA may issue a statement denouncing any South Korean or U.S. moves linking the sinking to the North.

He noted that the U.S. Senate last week passed a resolution calling for a thorough probe of the incident, while South Korea will announce the results of a multinational investigation later this week.

“The SPA may announce measures and warning against South Korea and the United States,” Cho said.

Read the full story here:
N. Korea unexpectedly calls rubber-stamp parliament into session
Yonhap
Sam Kim
5/18/2010

Institute for Far Eastern Studies (IFES)
NK Brief No. 10-04-20-1
2010-04-20

Ri Ki Song, a professor at the Institute of Economics, a part of North Korea’s Academy of Social Sciences, acknowledged during an interview on April 18 that the North’s currency revaluation of last November had caused some instability to unfold across the country. Professor Ri emphasized during an interview in Pyongyang with Kyoto News, “there was some temporary unrest in some areas . . . but there was absolutely no social upheaval and unstable situations were immediately controlled.”

Professor Ri, in answering questions for the Japanese news agency, was the first North Korean to acknowledge the problems caused by the reform. Regarding foreign media reports of the currency reform, Ri stated that the articles did not reflect the reality of the situation, and that the reforms had not destabilized the North Korean society. These comments were in line with those he made on April 1, when he stated at an APTN press conference, “Many people outside of North Korea have been noisily prattling on about problems emerging during exchange rate fluctuations, but there is no social unrest of the kind they speak of.”

He explained that some instability had occurred because price controls and other measures had not immediately followed the revaluation, and that “markets did not open for a few days [after the currency reform],” acknowledging that preparations for the measures had been insufficient. He also explained that following the currency reform, North Korean authorities had taken steps such as reducing prices on some foods and slashing unproductive expenditures. The government also encouraged women to take up jobs in light industry and in the service sector, and repaired the transport system. In an effort to develop the economy in 2010, the North Korean government boosted the budgets for the light industrial sector by 10.1 percent, and that of agriculture by 9.4 percent.

Professor Ri went on to say that authorities had reduced the price of a kilogram of rice from 40 won to 24 won, had lowered the price of eggs to 8 won, and had cut the prices on cooking oil and soap, as well. He added that this trend will continue for the near future.

The currency revaluation, the first of its kind since 1992, was aimed primarily at increasing the value of the North’s money and harnessing inflation, but despite the reform, the government is still managing foreign exchange rates. While keeping exchange rates under control, Ri stated that authorities could still adjust the value of the won, depending on economic developments as well as other domestic and international conditions.

In both the APTN and Kyoto interviews, Professor Ri called foreign coverage of the North’s economic situation “exceptional,” and insisted that nothing was wrong with the DPRK economy.

According to KCNA:

Report on Implementation of 2009 Budget and 2010 Budget
 
Pyongyang, April 9 (KCNA) — Deputy Pak Su Gil, vice-premier and minister of Finance, delivered a report on the results of the implementation of the DPRK state budget for last year and its state budget for this year at the 2nd Session of the 12th Supreme People’s Assembly held on Friday.

According to the report, the state budget for last year was successfully implemented and, as a result, the state budgetary revenue was overfulfilled 1.7 per cent, an increase of 7 per cent over the previous year.

Ministries, national institutions, management bureaus and complexes overfulfilled the national plans for budgetary revenue and all provinces, cities and counties across the country also overfulfilled their plans for local budgetary revenue.

Last year’s plan for state budgetary expenditure was carried out at 99.8 per cent.

An investment from the state budget was focused on the development of metal industry while a huge financial allocation was made for the power and coal industries and the railway transport.

8.6 per cent more funds than the previous year were spent for capital construction and expenditure was increased for agriculture and light industry.

A 7.2 per cent greater financial disbursement than the previous year was made for the field of science and technology, surpassing the level of the latest science and technology in domains of space technology, nuclear technology and CNC technology and putting the key industries of the national economy on a high scientific and technological basis.

A large amount of fund went to the field of cultural construction and 15.8 per cent of the total state budgetary expenditure was spent for national defence.

The reporter said that the scale of revenue and expenditure in the state budget for this year has been set on the principle of improving the people’s standard of living to meet the requirements of the policy of the Workers’ Party of Korea on conducting a great offensive to bring about a decisive turn in the above-said work.

This year’s plan for state budgetary revenue is expected to grow 6.3 per cent over last year. The revenue from the profits of state enterprises, the main source of state budgetary revenue, is expected to go up 7.7 per cent over last year, that from the profits of cooperative organizations 4.2 per cent, that from the fixed asset depreciation 2.5 per cent, that from real estate rent 2 per cent and that from social insurance 1.9 per cent.

This year’s plan for state budgetary expenditure is expected to show an 8.3 per cent increase over last year.

The spending for the light industry is expected to go up 10.1 per cent, that for agriculture 9.4 per cent and that for metal, power and coal industries and railway transport 7.3 per cent as compared with last year.

The expenditure for the machine-building industry is expected to go up and an 8.5 per cent bigger financial allocation will be made for scientific researches and the introduction of new technologies.

A 6.2 per cent bigger financial disbursement than last year is expected to be made to more successfully enforce the popular policies, a proof of the advantages of Korean-style socialism centered on the popular masses.

15.8 per cent of the total state budgetary expenditure for this year is expected to be spent for national defence.

It is expected that a large amount of educational aid fund and stipends will be sent for the children of Koreans in Japan this year, too.

In order to successfully implement this year’s state budget, all domains and units of the national economy should work out enterprising and realistic business strategy and management strategy and tenaciously carry them out by relying on a high degree of mental power of the producer masses and thus fulfill the plans for budgetary revenue without fail, stressed the reporter.

And according to the Choson Ilbo:

North Korean leader Kim Jong-il can freely dispose of 20 percent of his country’s budget, a former secretary of North Korean Workers’ Party has said that. Hwang Jang-yop told the Asahi Shimbun, “Only 30 percent of the budget is spent on public services, while 50 percent is earmarked for military spending.” Hwang defected to South Korea in 1997.

Hwang was interviewed by the daily during his visit to Japan on April 4-8. “Kim Jong-il’s dictatorship is 10 times worse than his father’s. People have a painful life,” he said.

Asked if the North is likely to abandon its nuclear weapons program, he said, “There is no such possibility. But the North won’t use the weapons. They’re a means to maintain the regime.”

To the question why Kim’s eldest son Jong-nam was passed over for the succession, he said, “At first, Kim Jong-il thought of choosing his eldest son as his successor. But he seems to have changed his mind as he fell in love with Ko Young-hee, the mother of Jong-un, his third son, after Jong-nam’s mother Song Hye-rim died.”

Commenting on the North’s bizarre abductions of Japanese citizens in the 1970s and 80s, he said, “The North needed native Japanese to train agents who would work in Japan.”

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Kim Jong-il ‘Gets 20% of N.Korea’s Budget for His Own Use’
Choson Ilbo
4/12/2010