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DPRK anti-corruption drive: purge, policy change, or both?

Thursday, February 21st, 2008

A little over a week ago, the North Korean government announced an anti-corruption campaign in two agencies: the United Front Department and the National Economic Cooperation Council.

As I said then, these sorts of campaigns have nothing to do with making the bureaucracy more accountable or responsive to public demands, but are political maneuvers to prevent “rents” or funds from being channeled to uses that lie outside the leadership’s control (or some faction of the leadership). In other words, they are regime enhancing (like a purge).

Today, the Daily NK offers a scenario whereby this anti-corruption drive might be a necessary precondition for a drastic policy change:

The fact that the Guidance Department is involved in the current investigation may be a sign that Kim Jong Il is trying to rebuild the party so that he can change the focus of policy from the military to economic matters. Kim Jong Il has already created a militarily powerful country by acquiring nuclear weapons. Now he wishes to improve other areas.

Within the context of the anti-corruption campaign, today’s Daily NK does a wonderful job identifying the specific agencies involved in reorganizing the DPRK’s levers of power:

The Defense Security Command of the [Korean] People’s Army and the National Security Agency are also launching inspections, but these kinds of inspection are limited. A Defense Security Command investigation can inspect military organizations, local party organizations and individual cadres, but it cannot investigate party branches in the capital and the National Security Agency. At the same time, the National Security Agency’s investigators cannot access the party organizations in Pyongyang, the military and the Defense Security Command.

However, the Guidance Department’s inspection can examine every organization including party organizations in Pyongyang, the Defense Security Command, and the National Security Agency. [A Guidance Department investigation requires Kim Jong Il’s direct authorization. It is often said that if one is the target of such an investigation, one stands little chance of reprieve.]

There are only two known examples of a Guidance Department-led investigation in North Korean history. The first was the investigation of the National Security Agency in February, 1984. […] The second case occurred in 1997 and was known as the Shimhwajo case, resulting in the hushed-up removal of many of Kim Il Sung’s close associates. This inspection was approved by Kim Jong Il and was operated by Jang Sung Taek, Kim’s brother-in-law and the First Vice-Director of the Guidance Department. Through the investigation, thousands of high officials who followed Kim Il Sung were punished, expelled, secretly executed, or sent to prison camps.

To read about another similar change in the balance of power in the DPRK, read the rest of the story here:
Inside the North Korean Shake-up
Daily NK
Moon Sung Hwee
2/21/2008

Posted in Inter-Korean summit, Organization and Guidance Department, Political economy | 2 Comments »

North Korea launching massive anti-corruption drive

Monday, February 11th, 2008

Last Friday, Yonhap reported that Kim Jong Il has ordered an anti-corruption investigation of two key agencies, both of which manage South Korean investments in the DPRK: the United Front Department (which Lankov claims is involved in clandestine operations) and the National Economic Cooperation Council.

North Korea is in the midst of a massive anti-corruption drive which has already resulted in the arrest of one of its top officials handling business with South Korea, informed sources in Seoul said Saturday.

The campaign, ordered by leader Kim Jong-il, was prompted by widespread allegations that some top party and administration officials took bribes as they pushed business projects with South Korean industrialists, said the sources well versed in North Korean affairs.

“The probe was launched as National Defense Commission Chairman Kim Jong-il said there was a lack of supervision over the United Front Department [a key party organization that supervises inter-Korean affairs], although lots of suspicions were raised over the department’s corruption,” one source told Yonhap News Agency.

According to the sources in Seoul, the North Korean leader was enraged after getting a report that some party and government officials allegedly pocketed bribes and diverted food and other aid from South Korea to black markets.

Also under investigation is the National Economic Cooperation Council, a government body that handles business with South Korean entrepreneurs, the sources said.

The Council’s chief, Jeong Woon-eop, remains under arrest pending investigation into allegations that he took “huge amounts” of bribes, said the sources, who wanted to remain anonymous. (Yonhap excerpted)

Frequently “anti-corruption campaigns” in developing countries have nothing to do with making the bureaucracy more accountable or responsive to public demands, but rather are political maneuvers to prevent “rents” or funds from being channeled to uses that lie outside the leadership’s control (or some faction of the leadership). In other words, they are regime enhancing. The announcement of this campaign demonstrates two important principles that deserve explicit mention:

1. Not all profits earned by North Korean joint ventures are channeled to the leadership, and in fact many of them are siphoned off by middlemen who actually control the financial machinery. Once skimmed off the top, it is likely that these funds are used in illicit private commercial operations since they cannot be legally declared by the owner (unless there are domestic channels for laundering money in North Korea).

2. If funds are being siphoned off of high-profile official joint venture operations, then the leadership is not in control of its internal fiscal affairs. Indeed it is likely that, as in the Soviet Union, the people who keep the private economy running are the trusted mid- to senior-level officials who can skirt the rules and know how to actually get things done within the system.

Update 2/24/2008:

North Korean authorities have been investigating the chief of a North Korean committee in charge of inter-Korean economic cooperation for months after seizing $20 million from his house, a report said Friday.

The full article can be found here:
NK Official Suspected of Embezzling Funds From Seoul
Korea Times
Jung Sung-ki

Update 2/12/2008:

The chief of Daesung General Bureau, a division of the 39th Department which manages foreign transactions, was fired on suspicion of embezzling US$1.4 million last fall.” (Daily NK)

The full article can be found here:
North Korea launching massive anti-corruption drive
Yonhap
2/9/2008

Posted in Banking, Black markets, Daesung General Bureau, Economic reform, Finance, Fiscal & monetary policy, Foreign direct investment, Joint Ventures, Kaesong Industrial Complex (KIC), National Economic Cooperation Federation (DPRK), Political economy, United Front Department | 3 Comments »

NK Military Has Little Influence on Major Policy Decisions

Sunday, January 27th, 2008

Daily NK
Yang Jung A
1/27/2008

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Posted in Korean People's Army, KPA General Political Bureau, Military, Political economy, Songun, Worker's Party | Comments Closed

KINU “Business Conglomerates Appearing in North Korea”

Thursday, January 3rd, 2008

Daily NK
Yang Jung A
1/3/2008

Through its publication “North Korea is Changing” the Korea Institute for National Unification (KINU) highlighted numerous changes and reforms that have occurred in North Korea due to the 2002 “July 1st Economic Maintenance Reform Policy” (Hereon referred to as the “July 1 Policy”). This publication deals with the changes the North Korean economy is undergoing following the economic crisis of the 1990s, and expounds on the country’s prospects for future economic reform.

The following is a summary of the main points introduced in the publication.

The “Invisible Hand” at Work in North Korean Markets

Following the enactment of the July 1 Policy in 2002, agricultural markets transformed into general markets. Soon, industrial products were being sold alongside agricultural products as the free market spirit spread to the country’s distribution system.
Along with the rise of general markets, street markets, and individualized commercial activities, a new merchant class is emerging. People who are able to put to use business acumen and an understanding of market principles are able to accumulate personal wealth. This demonstrates that aspects of Western-style rationalist thinking, including the pursuit of profit-seeking are being instilled in the minds of the North Korean people.

It is difficult to say if this experiment in free market economics will be successful in the long run. More than anything, due to the rigidity of the North Korean regime, the realm in which the “Invisible Hand” can operate is greatly restricted. This is the fundamental paradox facing North Korea’s prospects for reform and opening.

“Hardworking Heroes” Become “People with Two Jobs”

As the economic difficulties became severe, work opportunities evaporated. Living off of the wages provided by the state became impossible. North Korean laborers responded to this by taking on side jobs or engaging in independent sales.

According to defectors living in South Korea, after the July 1 Policy, there has been an increase “People with Two Jobs.” These are people who are engaging in economic activities additional to their primary occupations. People are beginning to accept the notion that it is better to work for personal benefits than to receive the title of “Hardworking Hero.”

Such phenomena have also changed people’s perceptions about occupations in general. For example, the elite classes now prefer diplomatic positions and jobs where they can make international connections, rather than working in party or government positions. The common people prefer agricultural jobs with the benefits of access to the food distribution system and the ability to earn side profits by being a merchant. In addition, common people also prefer being personal drivers, photographers, workers at the Food Distribution Office, servicepersons, or fishermen.

Business Conglomerates Are Emerging in North Korea

With the implementation of the July 1 Policy, North Korea has witnesses the creation of its first business conglomerates. A case in point is the Korea Pugang Corporation, which has expanded to include 9 subsidiaries and 15 foreign offices engaging in various lines of work. The website of the “Korea Pugang Corporation” reveals that the company has around $20 million in capital and does an average of $150 million of business each year.

The executives in charge of the company’s growth are brothers Jon Sung Hun and Young Hun. President Jon Sung Hun is in his early 50s and studied abroad in Tanzania before returning home to teach English at Kim Il Sung University. He later became a businessperson. His English skills are among the top 10 in North Korea. Young Hun is in his 40s and is the president of a company affiliated with the Finance and Accounting Department of the Workers’ Party. His company dominates North Korean diesel imports.

If the Jon brothers are the representative examples of conglomerate-based new capital, Cha Chul Ma ranks high among those who earned capital due to their power in North Korean society. With his focus on doing business with China, Cha is known for his ability to earn foreign currency and dominates the foreign currency earning businesses belonging to the Standing Committee of the Supreme People’s Assembly. His personal wealth is said to be over $10 million.

As the son-in-law of Lee Jeh Gang, the First Vice Director of the Guidance Department of the Workers’ Party, Cha gets some support from his father-in-law. Cha, who is known to live so freely that he was seen wearing Bermuda shorts on the streets of Pyongyang, is said to be a “Representative Case of a North Korean who succeeded in business on his merits, regardless of assistance from surrounding figures”.

The Number One Worry is Sustenance

North Koreans are said to live three different lives: their family lives, their working or school lives, and their political lives. Their lives are organized by politics from “cradle to grave,” and they must attend various political meetings, organizations, and study sessions. However, there are many people who are unable to participate in regular meetings of their political units due to economic difficulties. As they do not receive sufficient food distributions and their wages are too low, they must seek their food independently through individual economic activities.

Because the transportation infrastructure in the country is not advanced, it takes at least half a month to one month to go into the countryside to search for food and then they must return and sell the food or daily-use items they acquired, leaving little time for any other activities. Ninety percent of North Koreans engage in some form of business, and as a result, only an estimated 30% to 60% participate in required political activities.

Marriage Culture

These days, in North Korea, the ideal spouse is the one who makes the most money. Previously, when North Korean women chose their spouses, they considered the social status of their potential suitor. However, after the economic crisis, they started to prefer businesspersons and people who earn foreign currency, instead of discharged soldiers and cadres. For men as well, they now prefer money to looks as society increasingly revolves around the economy. As a result, an overwhelmingly higher proportion of men marry older woman than before.

Marriage customs are simplifying as well. Before the economic crisis, women usually provided the domestic items for the household and men provided the estate. However, after the economic crisis, dowries have downgraded into simple things like clothes. Because the allocation of estates has been delayed, more and more people are living at their parents’ homes.

Especially for women, there have been some phenomenal changes. Many women consider marrying late or not marrying at all. Reasons for this include the fact that woman cannot marry men just because the men can’t work and needs a woman to bring home money. Even in such a patriarchal culture, such complaints are becoming increasingly common.

Posted in 2002 Economic reforms, Agriculture, Cabinet, Civil society, Dating/Courting, General markets (FMR: Farmers Market), Korea Pugang Corporation, Political economy, Public Distribiution System (PDS), Supreme Peoples Assembly, Transportation, Uncategorized, Worker's Party | Comments Closed

Hoiryeong Gives Special Holiday Provisions in Commemoration of Kim Jung Sook’s Birthday

Thursday, December 27th, 2007

Daily NK
Lee Sung Jin, Yang Jung A
12/27/2007

In contrast to the news that Kim Kyung Hee (Kim Jong Il’s blood sister) will visit Hoiryeong in commemoration of the 90th birthday of Kim Jong Suk, it was confirmed that only upper-level Party officers participated in the celebrations.

Rumors started circulating early this year that Kim Jong Il would visit Hoiryeong, North Hamkyung, which is the birthplace of Kim Jong Il’s mother Kim Jong Suk. However, with the commemorative event approaching, Kim Kyung Hee, instead of Kim Jong Il, was supposed to visit Hoiryeong.

A source in Hoiryeong said in a phone conversation with a reporter on the 23rd, “An event commemorating the 90th birthday of Kim Jong Suk was held in Hoiryeong from the 18th to the 20th of this month and after the 20th, celebrations were held in Pyongyang. Kim Kyung Hee, who was supposed to come, did not show up.”

He added, “Provisions resumed on the 21st in time for the holiday (Kim Jong Suk’s birthday). Items that were given out were rice, corn, noodles, and oil. Holiday provisions such as liquor, gum, juice, socks, hot pepper paste, snacks, and soap were disbursed starting on the 23rd.“

The footsteps of Pyongyang’s upper-level leaders have not ceased coming into Hoiryeong. Chairwoman Park Soon Hee of Union of Democratic Women, Im Kyung Sook of the Ministry of Commerce and other representatives females in North Korea visited Hoiryeong and participated in the 90th anniversary commemorations.

The news of Kim Jong Suk’s 90th birthday anniversary commemorations has been relayed through North Korea’s media.

The Chosun Central Television, with Kim Jong Suk’s birthday coming up, reported on the 21st that oath ceremonies at the party, army, and office levels took place in Hoiryeong on the 20th.

At the ceremony site, the broadcast relayed that large-sized banners were set up praising Kim Il Sung and Kim Jong Il and the propagandistic signs stating, “Our greatest tribute to Mother Kim Jong Suk, the anti-Japanese heroine. May the revolutionary life and the results of the struggles of the great brethren Kim Jong Suk be immortal!”

The participants in the commemoration were Kim Il Cheol (Minister of the People’s Armed Forces), Kim Jung Gak (First Vice Director of KPA General Political Department), Choi Tae Bok and Kim Ki Nam (the secretaries of the Central Committee of the Party), Yang Hyung Sup (the Vice-Chairperson of the Supreme People’s Committee), Jeon Seung Hoon (the Vice-Minister of the Cabinet), and others high level officials.

In Hoiryeong, a joint performance by the People’s Army’s orchestra opened the day with a concerto “May the loyalty go on forever.” On the 19th, the “Nationwide Youth Students’ Poetry and Singing” took place among 3,000 participants, which consisted of youth and related persons of the Youth League Central Committee in each region.

Even prior to this, the nationwide landscape and crafts exhibitions commemorating Kim Jong Suk 90th birthday anniversary were held on the 12th at the Pyongyang International Cultural Exhibition Hall and on the 18th, a variety of events such as the opening of the Central Arts Show at the Korean Fine Arts Museum was held.

One researcher at a national policy research institute said regarding Kim Kyung Hee’s absence, “It is known that she has been suffering from an alcohol addiction for a long time, so does not make frequent public appearances.”

Posted in Cabinet, Central Committee, Civil society, Domestic publication, Korean People's Army, KPA General Political Bureau, Public Distribiution System (PDS), Supreme Peoples Assembly, Worker's Party | Comments Closed

North Korea aiming to become a strong and prosperous country by 2012

Thursday, December 13th, 2007

Institute for Far Eastern Studies
NK Brief No. 07-12-13-1
12/13/2007

North Korea has paved the way to achieve its goal of becoming a strong and prosperous country by 2012, the one-hundred year anniversary of the birth of Kim Il Sung. This goal of reaching such a status in only five years was announced at the recent nationwide open assembly of intellectuals, the first such meeting in 15 years. Pyongyang first introduced the ‘Strong and Prosperous Country’ strategy in August 1998, announcing the national strategy of the Kim Jong Il regime through an article printed in the ‘Rodong Shinmun’, the newspaper of the North’s communist party.

Choi Tae-bok, secretary of the political department of the Workers’ Party central committee, stated in the closing speech of the recent intellectual’s assembly that the 100-year anniversary of the birth of Kim Il Sung was deeply significant, and stressed that “every intellectual must open the doors to [the era of] a strong and prosperous country” by the 100th anniversary of the birth of the nation’s founder.

Taking the position that North Korea has already become a strongly ideological nation by sticking to socialism, that on October 9, 2006, the North became a strong military nation by testing a nuclear weapon, and the focus in this year’s New Year’s Editorial on becoming an economically powerful country through economic development and improvement of the lives of the people, it appears that the North is proceeding with this national strategy on all fronts. This means that if the North can focus on its economic problems and become an economically strong nation over the next five years, it can proclaim to have become a Strong and Prosperous Country.

North Korea’s recent position on solving its nuclear issues and improving relations with the United States and South Korea adds some credence to the idea that Pyongyang has decided to solve its economic woes in a move to become this strong and prosperous country.

According to the North Korean point of view, the three issues of security, economy, and succession are related, and that security and succession issues cannot be resolved without first solving economic problems. North Korea showed a bold initiative in beginning to implement the February 13 agreement, and hosting the inter-Korean summit meeting was a reflection of Kim Jong Il’s ‘strategic resolve’.

Posted in 2012 Strong and Prosperous Nation (Kangsong Taeguk), Central Committee, Economic reform, Education, Worker's Party | Comments Closed

DPRK Unification Front envoy tours ROK industries

Friday, December 7th, 2007

Institute for Far Eatern Studies
NK Brief No. 07-12-5-2
12/7/2007

Kim Yang-gon, head of the DPRK Workers’ Party Unification Front department, led a North Korean delegation to the South, and after two nights and three days, returned to the North on December 1. The last time a North Korean head of the KWP’s Unification Front department visited the South was seven years ago, when, in September 2000, Kim Yong-soon visited Cheju Island. Government authorities are saying that Kim’s trip to the South was publicized in order to facilitate the smooth implementation of the 2007 inter-Korean Summit Declaration

On the day Kim’s delegation arrived, the group visited the Songdo Free Trade Zone, where he and his delegation were moved by a presentation by officials explaining the value of an Inchon-Kaesong-Haeju ‘West Sea Belt’. On the second day, the group visited Daewoo shipyards in Koje, the Busan Customs House, and other facilities.

The trip was reminiscent of when DPRK Cabinet Prime Minister Kim Young-il led a group of more than thirty North Korean entrepreneurs to Vietnam last October, spending four nights and five days walking around tourist areas, an export-processing zone, port facilities, and other industrial areas.

The Unification Front department is but one department within the Workers’ Party responsible for policies toward the South and other countries. Unlike the foreign liaison department, Office 35, and the strategy office, the Unification Front operates openly, but distribution of propaganda leaflets, management of pro-North groups, enticement of overseas Koreans, and other activities are also underway.

The trip South by Kim’s delegation happened just before ROK presidential elections, and highlights the fact that there is barely a month left before North Korea must have its nuclear program frozen and fully disclosed. Kim’s trip to the ROK was promoted and publicized from the beginning, but little information was given to the press, other than coverage of tours of economic facilities.

Posted in Economic reform, Institute for Far Eastern Studies, Political economy, United Front Department | Comments Closed

Recent DPRK market restrictions extended to mobility of the people

Tuesday, November 27th, 2007

Institute for Far Eastern Studies
NK Brief No. 07-11-27-1
11/27/2007

Following Kim Jong Il’s August 26 announcement that, “Markets have become anti-Socialist Western-style markets,” measures to increase restrictions on markets across North Korea have also restricted individuals’ ability to migrate.

The Central Committee of the (North) Korean Workers’ Party released a statement in October, revealing that Kim Jong Il had stated, “The current state of anti-socialism should not be moderately opposed. A strong and concentrated attack must be laid out in order to thoroughly eliminate [this anti-socialist behavior].”

According to the Daily NK, an informant inside North Korea revealed that authorities are “contacting people who have applied for permission to travel to other regions at their trip destination and setting up interviews in order to verify that interviewees are conforming with their [stated] intentions,” and, “ultimately, long distance wholesalers are restricted in their movements, cause a reduction in the amount of goods circulating on the markets.”

Good Friends, a South Korean NGO for North Korean aid, also reported, “In North Hamgyung Province, if someone is absent from work for two days or not seen in their neighborhood, that person’s actions are carefully investigated,” and, “if someone does not check out, each of their family members are called in for interrogation.”

After the ‘Arduous March’, as market activity grew in North Korea, the number of whole-saling ‘middle-men’ grew considerably. These traders received travel permits by applying under the guise of visiting authorities, family matters, special occasions, or other personal reasons. Long-distance traders need a travel permit. In order to get such a permit, cash or goods were frequently offered as bribes.

Now, as it is becoming more difficult to receive travel documents, not only long-distance traders but also even normal vacationers are facing growing difficulties. In particular, people who need to travel to China for family visits are especially worried due to the increasingly strict issuance of travel permits.

The insider reported, “As markets grow, because wholesalers are gaining power as they make large amounts of money, authorities seem to be strongly restraining them,” and “if a wholesaler is caught, his goods are taken, leading to difficulties for market traders.”

According to a North Korean defector in the South with access to DPRK information, university students in Pyongyang are also being subjected to increasingly strict personnel inspections and restrictions. Even when they go to the library, they must fill out an exit record and can only remain out for one day before student leaders pay a visit to their home.

Students not strictly obeying school policies have their bags and pockets searched while being put under investigation and being further restricted. Of course, in the past, as well, students with problems faced inspections of their dormitory or personal goods, but recently, inspections of even everyday students are on the rise.

Posted in Arduous March, Black markets, Civil society, Domestic publication, Economic reform, Education, General markets (FMR: Farmers Market), Institute for Far Eastern Studies, Worker's Party | Comments Closed

Inspecting Markets, the Hotbeds for Anti-Socialist Activity

Thursday, November 15th, 2007

Daily NK
Kwon Jeong Hyun
11/15/2007

North Korean authorities have recently tightened regulations in markets as a warning against private economics, according to inside sources.

The regulation of Pyongyang markets has continued since President Roh Moo Hyun’s visit to North Korea in the beginning of October. North Korean authorities closed all markets in Pyongyang during the Inter-Korea Summit under the whitewash of mobilizing a welcoming crowd. Afterwards, when it reopened the markets, street venders and women under the age of 40 were restricted from engaging in business.

The North Korean inside source said in a November 12th phone conversation that “With the increase in Pyongyang markets, the authorities are not looked at in a favorable light. Regulations worsened after President Roh’s visit to Pyongyang.”

“A week or two before President Roh’s visit, regulations became strict, such as prohibiting outsider visits to Pyongyang and ceasing the operations of the jangmadang (markets). From that point on, the jangmadang has been persistently regulated.”

Leading up to the Inter-Korea Summit, North Korean authorities implemented other civilian regulations as well, such as issuing “special travel permits.”

One Pyongyang trading company head, currently in Dandong, China, said in a meeting with a reporter, “Regulations were tightened after word got out that a clandestinely filmed video clip showing Pyongyang markets had been widely broadcasted in South Chosun (Korea).” He surmised that a clip showing Pyongyang’s Sunkyo Market has been broadcasted on Japanese news programs three times since last month.

He also said, “A decree was issued by the Pyongyang People’s Committee that women under the age of 40 should be employed in enterprises. Our enterprise received the same decree, so we have to take in 200 female workers.”

He said however, “Too many workers have been dispatched, even though our enterprise business is not that large. We objected, saying that we can not receive them because we can not even give them provisions. Other enterprises in Pyongyang are in the same position.”

He emphasized, “People go to the market, because the state cannot sustain them. The party leaders also survive relying on the market, so regulation of the market is impossible. Market control can only be a temporary because the wives and daughters of party leaders are in the situation of selling goods as well.”

He also added, “The number of people in charge of general markets is exorbitant across the country. Those who received 30,000 won per month have to go into enterprises where they will only get 2 to 3,000 won. Restricting the market is something nobody wants.”

The North Korean state is currently prohibiting the undertaking of businesses by women under 40. In North Hamkyung Province, the business age limit will be fixed at 45 and above starting in December, so the members of the Union of Democratic Women have put up a significant resistance.

According to an internal Workers’ Party document which has recently come into the hands of a diplomatic source, the North Korean government is supposed to have given the order to “regulate the markets, as they are hotbeds for anti-socialist activity.”

The document, which was published last October under the auspices of the Central Committee of the Chosun Workers’ Party, read, “The Great Leader Kim Jong Il pointed out, ‘In order to absolutely eradicate this anti-socialist phenomenon, we have to unfold a concentrated offensive.’”

The document states, “Civilians were able to attain some comfort through the market; but now, it has deteriorated into a place that breaks societal order and national rules. In one city, several tens of thousands of merchants come out to the sidewalks and even car lanes and have brought about a severe disruption in traffic.”

The paper gives evidence to the fact that the North Korean government itself recognizes the citizens’ growing reliance on the market due to market revitalization, and that anti-socialist activities are rampant.

The document further criticized, “A more serious issue is that mostly women under the age limit are conducting business in the market, and women who have received high-level education under the auspices of the Party and the nation have thrown away their positions to go into sales, an act which forsakes justice and the most basic conscience.”

Additionally, it specifically addressed those who disseminate illegal South Korean film products, “middlemen,” referring to brokers who secretly sell nationally-regulated, military, and electronic goods, and Chapan-Jangsa (selling goods off trucks) who earn excessive profits from wholesales.

Posted in 2002 Economic reforms, Black markets, Central Committee, Civil society, Domestic publication, Economic reform, General markets (FMR: Farmers Market), Price liberalization, Worker's Party | Comments Closed

DPRK Workers’ party focuses on building economic powerhouse

Thursday, November 8th, 2007

Institute for Far Eastern Studies (IFES)
NK Brief No. 07-11-8-1
11/8/2007

According to the November 6th issue of the Chosun Shinbo, a newspaper published by the General Association of (North) Koreans in Japan, North Korea has taken an opportunity at the “National Meeting of Secretaries of Cells of the Workers” Party” (Pyongyang, October 26~27), the first held in the last 13 years, to shift the focus of the Workers’ Party to “building a great economic nation”. North Korea also specifically reported the policy goal of building the North into an economic powerhouse by issuing reports through each of its media outlets. In the October 23rd edition of the Workers’ Party newspaper, Rodong Shinmun, Party officials called for a “struggle to create a great economic nation.”

According to the Chosun Shinbo, “By tasking the highest organs of the Party with focusing on the realization of economic policy, we are effectuating a shift in operations to cope with a new era,” and, “at this conference, the construction of the Party’s great economic nation was organized, and the project and plans for increasing the role of Party cells were discussed.”

Party cells are the smallest units of the Workers’ Party, and these cell secretaries are responsible for the front line of Party policy implementation. The Workers’ Party Central Committee’s congratulatory address at the conference stressed the need for a “united march to construct a great economic nation and improve the lives of the people,” and stated that the Party understood that economic issues were at the heart of Party cell concerns.

In the conference report, it was stressed that it was Kim Jong Il’s firm determination and will that “through Military-First politics, not only are the country and military number one in our ideology, but that we make economics number one as well, in order to live well without feeling envious of others.” According to the newspaper, “As the political environment surrounding North Korea is changing, when this conference’s decision to stress the goal of building a great economic nation is carried out by the highest organs of the Party, it will be an important shift in all Party undertakings.”

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