Archive for the ‘Planning and Fiscal Affairs (KWP)’ Category

The 8th WPK congress announcement: strengthened economic control to come?

Wednesday, August 19th, 2020

By Benjamin Katzeff Silberstein

So, the news are out: the central committee of the WPK has formally decided that the Party will hold its 8th Congress in January 2021:

8th Congress of WPK to Be Convened
Pyongyang, August 20 (KCNA) — A decision of the 6th Plenary Meeting of the 7th Central Committee of the Workers’ Party of Korea was made on August 19.
The decision is as follows:
Our Party and people are carrying out the historical task set forth at the Seventh Congress of the Workers’ Party of Korea while breaking through head-on all the barriers to our advance by organizing and launching an arduous revolutionary struggle.

Through this indomitable struggle for implementing the decision made at the Seventh Congress of the WPK the dignity and position of our state has been remarkably raised, the single-minded unity of the Party and the people further consolidated and a great revolutionary turn made in the building of the Party and its overall activities.

On the other hand, economy was not improved in the face of the sustaining severe internal and external situations and unexpected manifold challenges, thereby planned attainment of the goals for improving the national economy have been seriously delayed and the people’s living standard not been improved remarkably.

The plenary meeting, after analyzing and reviewing the experience and lessons from the work of the past five years for building a powerful socialist country, decided to convene the Eighth Congress of the WPK as follows to set forth a correct line of struggle and strategic and tactical policies on the basis of the new requirements of our developing revolution and the prevailing situation:

1. The Eighth Congress of the WPK will be convened in January, Juche 110(2021).
2. The agendas of the Eighth Congress of the WPK are as follows:
1) Review of the work of the Central Committee of the WPK
2) Review of the work of the Central Auditing Commission of the WPK
3) On revising the rules of the WPK
4) Election of the leadership organ of the WPK Central Committee
3. One delegate with the right to vote to the Congress will be appointed among every 1 300 Party members and one delegate with the right to speak among every 1 300 candidate Party members. -0-

Kim Jong-un’s speech, however, was far more interesting than the announcement of these agenda items. In my opinion, there are hints in his speech that the Party will continue down the road of strengthening state and Party control over the economy. That doesn’t necessarily spell a return to central planning, but it does mean more restrictions and stronger demands that enterprises and other economic actors adhere to state “goalposts”; perhaps targets of production, and sectors of priority. More like a developmental state than a Stalinist command economy, at least in theory.

Look, for example, at the following two paragraphs from the summary of his speech (my emphasis):

Calling for regularly convening the congresses of the Party, the supreme guidance organ of the Party, in order to confirm the line, strategic and tactical measures for steering the development of the times and the revolution and adjust and reinforce the leadership body for guaranteeing their execution, he advanced the important guidelines for the operation of the congress.


The Supreme Leader stressed the need for all the sectors and units including the Party organizations at all levels, power organs and organs of the armed forces to regularly in time sum up the results of the work so as not to deviate from the implementation of the Party’s basic lines, policies and decisions. He also said that they should encourage and develop good successes, overcome shortcomings and take rectification measures at the double and thus achieve new progress in advancing the revolution and construction and in strengthening the Party.

This fits well with the simultaneous announcement of another five-year plan for economic development. This also doesn’t mark a return to central planning, necessarily, but rather, the state asserting its right to set forth the main guidelines of economic development. The last one, adopted in 2016, was subsequently abandoned, and we should also not expect this coming strategy to be entirely written in stone.

The agenda item about the central auditing commission is also interesting. In these contexts, auditing often entails the state scrutinizing the books of various organs, looking for off-the-books resources and other ways to bring in more cash to the state.

An agenda item for the central auditing commission is nothing unique in itself, but substantially, it may relate to the current push of the state to take in more resources from wherever they can be found.

Over the past couple of years or so, as its funds have run increasingly low, the state has been pushing private and semi-private economic actors to hand over more of their resources to the government. Strengthening auditing practices may be a way of institutionalizing this push more regarding finances related to the Party.

(Update 20/8/20: I clarified the text somewhat above about the central auditing commission after this came up in a twitter discussion.)


North Korea increasing coal production – seeking to ease power shortages and boost exports

Wednesday, February 2nd, 2011

Pictured Above: Pongchon Coal Mine (Google Earth)

Institute for Far Eastern Studies (IFES)
NK Brief No. 11-01-18

The DPRK Workers’ Party’s newspaper, the Rodong Sinmun, recently featured a front-page editorial urging the North Korean people to increase coal production. On January 26, the KCNA reiterated the call, reporting that the newspaper editorial highlighted fertilizer, cotton, electricity, and steel as products suffering from a lack of coal, and that “coal production must be quickly increased in the Jik-dong Youth Mine, the Chongsong Youth Mine, the Ryongdeung Mine, the Jaenam Mine, Bongchon Mine [Pongchon Mine] and other mines with good conditions and large deposits.”

The editorial also emphasized that “priority must be placed on the equipment and materials necessary for coal production,” and, “the Cabinet, national planning committee, government ministries and central organizations need to draft plans for guaranteeing equipment and materials and must unconditionally and strongly push to provide,” ensuring that the mines have everything they need. It also called on all people of North Korea to assist in mining endeavors and to support the miners, adding that those responsible for providing safety equipment for the mines and miners step up efforts to ensure that all necessary safety gear is available.

In the recent New Year’s Joint Editorial, coal, power, steel and railways were named as the four ‘vanguard industries’ of the people’s economy. Of the four, coal took the top spot, and all of North Korea’s other media outlets followed up the editorial with articles focusing on the coal industry. On January 15, Voice of America radio quoted some recent Chinese customs statistics, revealing that “North Korea exported almost 41 million tons of coal to China between January and November of last year, surpassing the 36 million tons exported [to China] in 2009.” It was notable that only 15.1 tons were exported between January and August, but that 25.5 tons were sent across the border between August and November.

North Korea’s coal exports to China earned it 340 million USD last year, making the coal industry a favorite of Pyongyang’s economic and political elites. Increasing coal production is boosting output from some of the North’s electrical power plants, while exports to China provide much-needed foreign capital. However, even in Pyongyang, where the electrical supply is relatively good, many houses lack heating and experience long black-outs. Open North Korea Radio, a shortwave radio station based in the South, reported on January 24, “As electrical conditions in Pyongyang worsen, now no heating is available.” Farming villages can find nearby timber to use as firewood, but because prices are so high in Pyongyang, even heating has become difficult. Some in the city even wish for rural lifestyles, just for the access to food and heat.


DPRK strengthens control mechanisms with revised law on the people’s economy

Friday, November 26th, 2010

Institute for Far Eastern Studies (IFES)

NK Brief No. 10-11-26-1

North Korea has recently revised its law governing the planning of the People’s Economy, significantly strengthening the state’s ability to oversee and control economic activities throughout the country. The South Korean Ministry of Unification recently released the contents of the law, which the North revised on April 6, as well as details of two laws created by the Supreme People’s Committee Standing Committee on July 8; the Law on Labor Protection (Order 945) and the Chamber of Commerce Law (Order 946).

The new law on economic planning contains seven new articles, but since the details of the August 2009 revision were never made public, it is unclear when the new articles were added. What is clear, however, is how different the new law is when compared to the Law on Planning the People’s Economy that was passed in May, 2001 and the Economic Management Reform Measure enacted on July 1, 2002, both of which significantly boosted the autonomy of business managers and eased government restrictions on economic activity.

With the July 1 Measure, the authority of the National Economic Planning Committee was downgraded, central allocations were graduated based on managerial autonomy and profits, the central rationing system was dismantled, and wages were increased. While the economic planning law of 2001 and the July 1 Measure of 2002 eased restrictions on, and oversight of, the people’s economy, the newly-revised law strengthens state control. The new law appears to not only return but also bolster the central control mechanisms that were eliminated by the 2001 law.

Article 16 of the new law states that the planned economy will be based on prepared figures, while Article 18 states that enterprises, organizations and companies will operate on the principle of ensuring regulated numbers, and Article 24 requires the people’s economic plan, drafted by the Cabinet, State Planning Organization, and regional authorities, to be broken down in detail, by timeframe and indexes, and distributed to enterprises, organizations and companies by the end of October. The planning law passed in 2001 called for economic plans to be drawn up based on production statistics provided from ‘below’ and passed up through chains of command (Article 17), but this has been eliminated from the new law.

With the revision of the law on labor protection, North Korea has added more specific language to Article 12 of the ‘Socialist Labor Law’, which was established in April 1978. Article12 of the Law on Labor Protection states that the protection of laborers’ work is the primary demand of the socialist system, which sees the people as the most precious resource. The law strengthens the role of the state in protecting laborers, and identifies ‘difficult and strenuous’ jobs, including mining, fishing, and earthquake investigation. Workers in these fields are to be given favorable treatment, including the issuance of additional clothing, food and other rations.

In addition, the law covers the installation and maintenance of safety equipment, the issuance of protective gear, and additional protections for female workers. It also restricts work to eight hours per day and guarantees holidays and time off, health care, and protection of property. These and other articles in the law increase state management of workers, but defector testimonies paint a different picture. Most workers save their wages with the assumption that they will have to pay bribes, medical costs and other expenses out-of-pocket.

The law on commercial activity further details the ‘Chamber of Commerce Regulation’ handed down by the Cabinet in 2008. The law covers a range of duties and rights regarding commercial operations, including contracts and operations regarding joint ventures with foreign firms; legal letters of confirmation, certificates of country of origin and other paperwork related to trade issues; as well as exhibitions and conventions held in conjunction with foreign businesses.


DPRK signals strengthening central government

Wednesday, November 17th, 2010

According to the Choson Ilbo:

The North Korean regime is enacting sweeping changes to the law to bolster state control. A source familiar with North Korean affairs on Tuesday said four North Korean laws covering economic planning were revised in April and laws governing management of Pyongyang were revised in March.

The revised laws, which the source claims to have seen, “show the central regime’s intention to control everything, from the economy to the daily lives of the people.” North Korea has changed or enacted at least 17 different laws since November last year, just before a botched currency reform.

The revised economic planning law deletes a phrase in Article 17, which stipulated that the economy is planned “in line with methods that are presented from lower levels.” According to the source, the regime inserted the phrase when it announced timid economic reforms in July 2001 in order to give more authority over production to individual factories and businesses. “The deletion of the phrase demonstrates the intention to retrieve that authority,” the source said.

Instead, the terms “provisional figures” and “control figures” were revived after their omission in 2001. “The term ‘provisional figures’ refers to the potential output each factory sets, while ‘control figures’ represent the actual output amount assessed by the central government,” the source said. “So the terms strengthen the centralized economic planning regulations of the past.”

In Article 27, a new clause was inserted which reads, “The planning of the people’s economy is a legal task.” The source said, “This means that the partial freedom given to individual factories over production has now been taken away completely.”

The law on the management of Pyongyang, which was revised on March 30, also stresses the role of the state. Originally, maintenance and management of the capital were up to the Pyongyang City People’s Committee. But under the revision it falls into the hands of the State Planning Committee and the Cabinet. Also, all Pyongyang residents over the age of 17 have been ordered to carry their resident identification cards at all times.

Also added were articles that bind the central government to guarantee housing and the supply of necessities for the residents of Pyongyang. This shows the clear intention of the regime to take charge of housing and goods supply. “Labor and commercial laws also contain clear intentions to bolster government control,” the source said.

Kim Yong-hyun of Dongguk University, said as conditions worsened after the failed currency reform and North Korean leader Kim Jong-il’s son has been lined up to succeed his father, “the regime seems to feel that tighter internal control is better than aggressive reform. Even if North Korea is looking to partially open up through economic cooperation with China, this will be difficult to achieve with such a conservative approach.”

The Donga Ilbo also covered the story.

Read the full story here:
N.Korea Reverts to Hardline State Control
Choson Ilbo


Know the Party before Getting to Know Kim Jong Il

Wednesday, October 8th, 2008

Daily NK
Namgung Min

As rumors regarding Kim Jong Il’s illness surfaced during North Korea’s 60th anniversary celebrations, opinion was divided on whether the military or the Party will rise in power post-Kim Jong Il.

It is true that the power of the military rose post-Kim Il Sung, according to the “military-first” political line. The National Defense Commission (NDC) began leading various agencies and councils, and came to hold greater power because Kim Jong Il was introduced as the National Defense Commission Chairman during North-South Summits.

Thus, the National Defense Commission under military-first politics began to appear to be North Korea’s sole power base, as news on general-level promotions was released publicly by the National Defense Commission.

However, despite military-first politics, it remains the Chosun (North Korea) Workers’ Party that fundamentally controls the North Korean regime. Therefore, in order to understand the North Korean regime, one must understand the Chosun Workers’ Party.

Upcoming October 10th is the founding anniversary of this most important of organizations. The eyes of the world are focused on whether Kim Jong Il will appear on this day or not.

Therefore, it is time to closely examine what the Chosun Workers’ Party does and how it controls the North Korean regime.

The Korean Workers’ Party claims to be the direct heir to the North Korean Branch of the Chosun Communist Party that was established during “The Chosun Communist Party Convention of Leaders and Devotees of the 5 Northwest Provincial Party Committees” held on October 10th, 1945. Hence the founding date is October 10th. In April, 1946 the name was changed to the North Chosun Communist Party, which then became the Chosun (North Korean) Workers’ Party after being merged with Chosun New People’s Party in August of the same year.

North Korea is operated under the leadership of the Chosun Workers’ Party, as previously seen in other socialist countries; the nation’s power is concentrated in the Party. This implies that as the Party controls the country, the country is evolving into a socialist society and from there into a communist society.

The Workers’ Party, venerable as it is, not only holds the highest position of authority in North Korea but thus stands above other national agencies, organizations or the military.

I. The positions and roles of the Chosun Workers’ Party

The positions and roles of the Workers’ Party are described in detail in the “Rules and Regulations of the KWP,” “Ten Principals for the Party’s Unique Ideological System” and the “Socialist Constitution of North Korea.”

It is written in Article 11 of the Socialist Constitution, amended in 1998, that “The DPRK shall conduct all activities under the leadership of the Workers’ Party.” Furthermore, the Workers’ Party is stated to be an organ that controls other agencies and organizations as the highest revolutionary organization leading all other working organs.

However, the socialist constitution and the rules of the Party are only for the purpose of propagating the notion of the rationality and legitimacy of North Korea abroad while concealing a dictatorship. The reality within North Korea is completely different from the actual contents of the constitution.

In actuality, the socialist constitution and the rules and regulations of the Party defines that all sectors such as government, military, administration, judiciary, and even public prosecutor’s office are led by the Party, while being utilized as the apparatus for Kim Jong Il’s Stalinist dictatorship. That is, the regulations recognize the Party’s leadership of the country and simultaneously state that the Party can only be operated and led by Kim Il Sung and Kim Jong Il.

The Workers’ Party in legal terms is an organ that guides North Koreans, but in reality it is only an organ under the iron command of the supreme Leader. Therefore, the Leader stands in the highest position, above the Party, nation and sovereign organs.

II. The structure and functions of the Chosun Workers’ Party

The utmost decision-making organ of the Workers’ Party is the National Party Congress.

According to the rules and regulations of the Party, all decision making of the Party regarding policies, strategies, and tactics should be passed through the National Party Congress. However, in actuality the Party Congress only rubber stamps the decisions that were already made by the Central Committee of the Party.

It is theoretically a ground rule that the Party Congress meets once every 5 years. The first congressional meeting was held in August 1946, the Congress met for the 6th time in October 1980, but has failed to meet since; 28 years. The fact that the Congress is not meeting regularly signifies that the regime system is not operating according to accepted principles of socialist states in the past.

If the Congress fails to meet, the Central Committee of the Party functions as the highest decision-making organ. The Central Committee should meet and discuss issues once every 6 months.

During these meetings, the General Secretary, committee members and the Presidium of the Politburo and committee members of the Central Committee of the Party should be elected. The Central Committee also has the authority to organize the Secretariat and the Central Military Commission.

However, even these twice annual meetings have not been held since the 21st meeting of the 6th cohort in 1993. When the meetings are not held, then the Politburo needs to take authority. However, the Secretariat of the Central Committee, whose General Secretary is currently Kim Jong Il, currently does so.

The highest organ in a communist society is officially the Presidium of the Politburo. In North Korea, Kim Jong Il is the only left in the presidium after the deaths of Kim Il Sung and Oh Jin Woo. This is why North Korea is sometimes called a totalitarian state. In the Chinese government, the Politburo presidium is properly functioning and decisions are made here. From a “democratic” perspective, the Chinese Communist Party and the Chosun Workers’ Party are completely different.

In any case, within the Secretariat of the Central Committee there are specialty departments such as the Guidance Department, Propaganda and Agitation Departments, and the United Front Department, and it also includes departments that supply secret funding to Kim Jong Il such as the 38th and 39th Departments.

The provincial organs of the Party consist of party committees of provinces, cities and counties that even include the most basic low-level party committees such as elementary party committees and sector party committees.

The structure of the Workers’ Party can also be divided into permanent party organs and temporary collective leadership groups. The permanent party organs include all members who work in any specialty departments, from the Central Committee down to low-level provincial party organs. Temporary collective leadership groups signify councils of high-level or low-level leaders of the central and provincial organs, made to implant permanent authority within the society through various meetings.

There are approximately 4,000,000 members of the Workers’ Party, including Kim Jong Il, high-level officials to low-level members, and figures from the legislature, judiciary, and the administration.

III. Main Departments and Their Roles

The main government complex of the Central Committee of the Worker’s Party is located in Changkwang-dong, Joong-district of Pyongyang. There are many buildings in the complex which include Kim Jong Il’s personal office and most of the Central Committee departments.

The second government complex is located in Junseung-dong, Moranbong-district of Pyongyang. The Social Culture Department, United Front Department and Operations Department are included in this complex.

The Workers’ Party has placed all specialty departments under the authority of the Secretariat, to function as restriction and guidance on all areas of the party members, citizens and North Korea. There is a Guidance Department that observes party members then there are other departments that exercise political functions.

The Guidance Department actualizes party guidance and restraint within communities. The department functions as Kim Jong Il’s right hand and as the core department by restraining the lives of all officials, members and citizens within the party.

The Guidance Department sub-divides into the inspection department, official department, party-member registration department, administration department and a communication department that allows direct reports regarding any incident or accident. The Guidance Department also manages the judiciary and the public prosecutor’s office.

The inspection department is responsible for inspecting any anti-party, non-party, undisciplined or unreasonable activities that develop within the regime or leadership of the Party and report to Kim Jong Il. The Guidance Department inspection section is strictly separated from other departments and North Korean party members or officials are all fearful of it.

There are approximately 20 specialty departments such as the Propaganda and Agility Department, the 38th and 39th Departments to supply fund to Kim Jong Il, the United Front Department dealing with South Korea, the International Department, the Science Education Department, and the Operations Department that carry out political activities.

Currently the Korean Workers’ Party is in the middle of the process of replacing 1st or 2nd generation leaders with 3rd or 4th generation, often more practical, personnel.


N.Korea’s Leading Apparatchiks

Thursday, September 18th, 2008

Choson Ilbo

Gen. Hyon Chol-hae, the 74-year-old deputy director of the general political department of the North Korean People’s Army (KPA) has been North Korean leader Kim Jong-il’s most frequent companion on official occasions. Hyon has accompanied Kim, who is said to be recovering from a stroke, on 32 occasions this year.

In analysis of senior North Korean officials who have accompanied Kim on his inspections of various facilities until Aug. 14, Hyon was followed by Gen. Ri Myong-su (71), director of the administrative department of the National Defense Commission (29 occasions); Kim Ki-nam (82), director of the propaganda department of the North Korean Workers’ Party (KWP) (22 occasions); Pak Nam-gi (74), director of the planning and fiscal affairs department of the KWP (10 occasions); Kim Jong-gak (62), first vice-director of the KPA’s general political department, Pak To-chun, chief secretary of the WPK Jagang Provincial Committee, Kim Kyok-sik, chief of the KPA general staff (seven occasions); Jang Song-taek (62), director of the administrative department of the KWP (five occasions); and North Korea’s first vice foreign minister Kang Sok-ju (67) (five occasions).

During these inspections, Kim has given instructions to military officers, government officials and plant managers. The more often these elderly men accompany Kim, the closer the Unification Ministry, which carried out the analysis, considers them to the North Korean leader. Hyon, Ri, Kim and Pak ranked first through fourth in 2007 as well

Song Dae-sung, a senior researcher at the Sejong Institute, said there is no big change in the ranking order of those closest aides to Kim Jong-il, who are assisting Kim on his sickbed or governing North Korea on his behalf.

Hyon Chol-hae
The KPA’s general political department, which Hyon controls as deputy director, is in charge of the entire KPA organization. A graduate of the Mangyongdae Revolutionary School, which families and descendants of the anti-Japanese partisans attend, he controls the school’s graduates, most of whom serve in the military. During the Korean War, he was Kim Il-sung’s bodyguard. He accompanied Kim junior on his visit to China in 2001.

Hyon stood on the platform alongside other North Korean leaders during a military parade on North Korea’s 60th anniversary on Sept. 9. According to analysts, normally only vice marshals or higher-ranking military officers are allowed to stand on the platform, and Hyon, a general, was an unprecedented exception.

Suh Jae-jean, director of the Korea Institute for National Unification, said, “It seems that Hyon Chol-hae is currently running North Korea behind the scenes. He is expected to play a leading role in laying the foundation for the post-Kim Jong-il era according to Kim’s wishes.” The institute says Hyon also has connections with Kim’s second son Jong-chol (27).

Ri Myong-su
Ri is director of the administrative department of the National Defense Commission, North Korea’s de facto supreme leadership. As the NDC’s administrative department director, he controls inspection and intelligence activities within the KPA. Until last year, he was under Kim Jong-il’s direct command as the director of the KPA’s operations department.

Ri emerged as a strongman in the process of Kim’s succession to power in the 1970s, by displaying loyalty to him. He has been Kim’s second most frequent companion since 2003.

Ryu Dong-ryeol, a researcher at the Police Science Institute, said, “Hyon and Ri directly report to Kim Jong-il.”

Kim Ki-nam
Kim is a well-known figure in South Korea since making an unannounced visit to the Seoul National Cemetery when he was in Seoul as the chief of a North Korean delegation to a “Unification Festival” marking Liberation Day on Aug. 15, 2005. He is Kim’s mouthpiece as secretary for propaganda for the KWP Central Committee. He was the editor-in-chief of the Rodong Shinmun, the organ of the KWP Central Committee, in 1976. In 1985, he was appointed director of the propaganda department of the KWP Central Committee.

Lee Ki-dong, a senior researcher at the Institute for National Security Strategy, said, “Kim Ki-nam will be in charge of publicizing at home and abroad Kim Jong-il’s decision about a successor.”

Pak Nam-gi
Pak is in charge of North Korea’s economy. Since 1976, he has worked as an economic expert as vice chairman of the State Planning Commission, the agency that controls North Korea’s planned economy.

As the first vice-director of the KPA’s general political department, Kim Jong-gak is in charge of propaganda within the military. Kim Kyok-sik assumed the post as the chief of KPA general staff in April last year, and Pak To-chun has served as the chief secretary of the KWP Jagang Provincial Committee since 2005.

Jang Song-taek, Kim Jong-il’s brother-in-law, fell out of favor with Kim in May 2004. But he came back in 2006 and has since controlled powerful agencies such as the Ministry of Public Security and the State Security Department, and prosecutors’ offices. He is reportedly close to Kim’s eldest son Jong-nam (37).

Kang Sok-ju played a major role in reaching the U.S.-North Korean Geneva Agreement in 1994.