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Another Lie “We Will Give Rations”

Wednesday, May 30th, 2007

Daily NK
Han Young Jin
5/30/2007

The rice-planting season began at the beginning of May. Consequently, city and provincial safety agencies have adjusted market hours at Jangmadang (markets) affecting the lives of North Korean people greatly, a source informed on the 30th. Even street vendors have been completely prohibited from selling goods on the side alleys of Jangmadang.

Ever since the rice-planting season began, the markets open at 5 o’clock in the afternoon until sunset. Basically, sellers can only trade for 3 hours at the most.

Park(43) who lives in the border regions of North Hamkyung province said, “We live by selling at Jangmadang. I feel like cast a spiders’ web in my throat because the authority forced to close Jangmadang during the farm supporting activity. Leaders of the People’s Units force members to work on the farms and the Safety Agents scowl Jangmadang like an eagle scavenging for food.”

She should support her husband working at a factory which manufactures farming equipment and two sons. Surviving the march of suffering, she began to sell noodles at the markets.

Park said, “If I sell things, at the least, I can make a little money and buy some corn. If I cannot trade for a month, I will have lost all my goods to waste.”

Every year, North Korea endures the rice-planting season and closes Jangmadang partially. Although many people buy rice and corn in advance, it is nonetheless a tough month for the people and acquiring food is a big concern.

“They said they would redistribute rations from April. Lately, they haven’t said anything but to be patient” said Park and added, “Since we cannot afford to have rice, I only hope that the price of corn does not increase.”

Rice which sold at 850 won in early May has already risen more 50 won. Fortunately, corn has maintained its cost at 300 won.

In North Korea, spring poverty season from early March is called as “Yellow Spring,” because the sky is seen yellow for the malnutrition or hunger. The period between end-May to mid-June is the time of “farm hardship (‘barely hump’ in Korean)” Around June 15th, when barley begins to ripen, the “farm hardship” disappears.

Normally as March approaches, people begin to deplete their stored a year worth of food. By May, the 6 months worth of Kimchi that was made in last December has been consumed and people resort to herbs and plants to accompany their meals.

More recently, as trade became common, there have been less cases where people have died from starvation.

It is even uncommon for Park’s husband who works for an agricultural factory to acquire distributions from his work. He is offered lunch when he gets called to fix equipment on the farms but then again, this doesn’t happen every day.

Hyun who trades between Pyongan and Hwanghae said dissatisfied, “They (authorities) said they would distribute rations as of April 1st. The people are angry as they feel they have been deceived once again. It is common practice that rice is lacking during the springtime, but I don’t understand why they keep attracting the people’s discontent by telling lies.”

He said, “People living in Pyongan are in a worse position than people living in the border regions. Traffic control officers roam the district of Moonduk, South Pyongan and regulate merchants by forcing them to the farms.”

Hyun added, “In the past, even amidst starvation, people in Pyongan believed that they were living in such deity because the U.S. ruined the economy. When I went there this time, the atmosphere was certainly different. People are blatantly cursing that the ‘nation cannot even feed and save the people.'”

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Posted in Agriculture, Economic reform, General markets (FMR: Farmers Market) | 1 Comment »

North Korean Soccer Sponsors

Wednesday, May 23rd, 2007

So, it looks like Hummel, a Danish sports apparel company is sponsoring the North Korean national soccer team.

http://www.hummel.dk/Company/Sponsorships/Football/North%20Korea.aspx

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Posted in Civil society, Football (soccer), Foreign direct investment, Sports | Comments Closed

NKorea’s capitalist enclave seeks foreign support

Wednesday, May 23rd, 2007

AFP (Hat Tip DPRK Studies)
Simon Martin
5/23/2007

The managers of this capitalist enclave in communist North Korea are appealing for the world’s support, saying their experiment in free markets can pave the way for regional peace.

Diplomats who toured the Kaesong Industrial Complex Tuesday were urged to set aside worries over the North’s nuclear programme and to invest in the complex adjacent to the world’s last and heavily fortified Cold War frontier.

“I know you are concerned about the political situation on the peninsula but I strongly believe inter-Korean projects can help reduce tension,” Kim Chul-Soon told lunch guests of diplomats and reporters who toasted the project with North Korean “Wild Flower” wine to the strains of Mozart.

Kim is executive vice-president of Hyundai Asan, the South Korean firm which since 1998 has invested 1.2 billion dollars in Kaesong and in the North Korean tourist resort of Mount Kumgang on the east coast.

Work began at Kaesong in 2005 and the complex now has 22 factories with five more under construction. The workforce totals some 12,100 North Koreans, including construction workers, and 700 from the South.

Ambitious plans, strongly backed by the South Korean government, call for some 2,000 companies employing 350,000 people by 2020.

A management committee of the two sides touts Kaesong as “the hope for the future” of the two Koreas, which had almost no economic exchanges until a groundbreaking summit in 2000.

Committee chairman Kim Dong-Kun noted that Kaesong was one of the battlegrounds of the 1950-53 war which cemented the peninsula’s division.

“I am confident it will pave the way for peace and stability in the Korean peninsula and Northeast Asia but I realise this will only be through strong international support,” he told diplomats.

Visitors to Kaesong are greeted by a portrait of North Korea’s “Great Leader” Kim Il-Sung, who died in 1994, as they pass through the heavily fortified frontier zone.

But the fenced-off complex, funded almost entirely by the South, is otherwise a propaganda-free zone. North Korean officials refer to “South Korea” rather than the “south side,” as official media terms its neighbouring nation.

Pictures of North Korea’s Kim dynasty are not in evidence, apart from on lapel badges, and presentations praise the private sector.

Managers say they want to emulate Shenzhen, the special economic zone bordering Hong Kong which kick-started China’s economic boom. But unlike in Shenzhen, North Korean workers — described as diligent, well-educated and eager to learn — cannot spend their wages as they wish.

Companies pay the basic wage, 57 dollars and 50 cents a month for a 48-hour working week, to North Korean officials.

The officials, on average, return 15-20 percent to the worker in North Korean won and the remainder in the form of food and other essentials.

Given the North’s crumbling command economy and persistent food shortages, jobs at Kaesong are still apparently desirable.

“Because North and South Korea are working together, it feels great because unification will come sooner,” said one female worker at the ShinWon textile factory in a typical response.

Asked how much she earns, she told AFP through an interpreter that “we earn enough to make a living and keep our stomachs full.”

Kaesong’s supporters say it will narrow the huge economic gap between North and South but they seek foreign support. Apart from one Japan-invested joint venture, all factories at present are owned by South Korean companies which enjoy tax breaks to invest.

Six sites have been set aside for overseas firms in the first phase.

Goods are labelled “Made in Korea” and are covered by Seoul’s free trade deals with Southeast Asia. But the United States, which sealed an FTA with South Korea recently, agreed only to consider the Kaesong issue later.

The aim is also to revitalise South Korea’s small- and medium-size firms, especially textile companies which are struggling against competition from cheaper Chinese labour. Textiles account for almost half of Kaesong’s total production worth 115 million dollars since it opened.

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Posted in Economic reform, Foreign direct investment, International trade, Kaesong Industrial Complex (KIC), Labor conditions/wages, Special Economic Zones (Established before 2013) | Comments Closed

Roh wants more cash for Kaesong

Tuesday, May 22nd, 2007

Joong Ang Daily
5/22/2007

President Roh Moo-hyun said yesterday that his government will accelerate investment in North Korea’s Kaesong industrial park, regarding it as part of South Korea’s “unification expenses.”

“My government has not sped up the pace of its investment in the Kaesong industrial complex due to political risks. I now regret that,” the president said in an interview with the Maeil Economic Daily and its cable news affiliate MBN.

“Uncertainties surrounding investment in Kaesong will prove to be far less than expected, as the North Korean nuclear problem is certain to be settled through dialogue and confidence-building measures. Economic benefits from the Kaesong project are immeasurable.”

The president stressed that smooth operations of the industrial park will help South Korea’s external economic credibility and small businesses struggling with rising labor costs.

“The most important factor [involving Kaesong] is unification expenses. One of the surest ways to reduce the expense of unification is to make the Kaesong project successful. We have to expand our investment in Kaesong as soon as the North Korean nuclear problem is settled,” said Roh.

The industrial park is one of two flagship projects South Korea operates to promote reconciliation with North Korea, along with tours of the North’s scenic Mount Kumgang. Over 13,000 North Korean workers are now employed in Kaesong by 23 South Korean firms.

But opposition parties and other conservatives in the South are accusing the Roh government of having blindly offered excessive aid to the Kaesong complex and other inter-Korean cooperation projects.

Roh also reiterated his determination to pursue an FTA with China.

“A free trade deal with China is inevitable. But we’ll conclude it after completing the restructuring of our agricultural sector through the FTA with the U.S.”

Commenting on South Korea’s economic growth potential, Roh said the nation’s economic growth rate will soon rise again to the 7 percent level from under 5 percent due to positive effects from FTA deals and massive planned investments in the construction of new administrative, business and public corporation towns across the nation, which are estimated to reach 54 trillion won by 2010.

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Posted in Economic reform, Foreign direct investment, Kaesong Industrial Complex (KIC), Mt. Kumgang Tourist Special Zone | Comments Closed

Experts Differ Over N.Korea’s Economic Openness

Tuesday, May 22nd, 2007

Yonhap
5/22/2007

A lawmaker of the pro-government Uri Party has said the North Korean economy has taken a step toward economic openness.

But North Korea watchers still remained suspicious as to whether the Pyongyang regime has the genuine determination to carry out market-oriented economic reform.

“I got the strong impression that the North is striving toward economic reform during my visit to Pyongyang,” said Rep. Choi Sung of the Uri Party in a telephone interview with The Korea Times Monday.

Choi visited the North from May 14 to 18 with 130 South Korean business leaders to participate in fairs to attract external investment.

The Stalinist country is unlikely to follow in the footsteps the former Soviet Union took in the post-Cold War era, and therefore, its growth model will take a different form, Choi said.

“The North is seeking a tailored growth model by introducing an incentive-based system while maintaining its communist regime,” said the lawmaker who has visited the North 20 times.

He said the library of one of the elite universities in the North displayed a wide array of information technology related publications, and citizens were anxious to learn English.

“Clerks working at shops selling souvenirs looked very business-oriented and tried to sell as many products as possible to their customers,” he said.

Asked if he had a chance to talk to any North Korean officials if they share his view, Rep. Choi said he had not.

He said it was very evident the North was moving toward economic openness.

His view, however, is at odds with what most North Korea watchers have expressed through media reports.

The Yonhap News Agency reported on May 18 that former North Korean Prime Minister Pak Pong-ju was removed and made manager of a chemical complex because his capitalism-oriented stance fueled objections from senior North Korea officials.

Pak was named manger of the synthetic fiber complex in South Pyongan Province, the report said.

Citing unidentified sources, the report said the former premier had called on the North to introduce an incentive-based system into its economy.

The conservative Chosun Ilbo newspaper supported the observation in an article published on May 19, saying that key officials calling for introducing an incentive-based system in the North have been demoted since the 1990s.

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Posted in Economic reform, Education, Labor conditions/wages, Library, Political economy | Comments Closed

FACTBOX: South Korea’s industrial park in the North

Tuesday, May 22nd, 2007

Reuters (Hat tip to DPRK Studies)
5/22/2007

The park is located in the North Korean border city of Kaesong about 70 km (45 miles) – (Reuters) – The Kaesong industrial complex in North Korea is set to grow by leaps and bounds in the next few years despite political problems in the wake of the communist state’s nuclear test last year, a South Korean executive said.

Here are some key facts about the Kaesong Industrial District:

LOGISTICS

The park is located in the North Korean border city of Kaesong about 70 km (45 miles) northwest of Seoul. A brand new highway runs through the Demilitarized Zone border taking workers from the South and finished products from the North.

Kaesong is the first cooperative manufacturing venture where South Korean firms use North Korean labour. It is run by Hyundai Asan, part of the Hyundai group, along with Korea Land Corp.

EMPLOYMENT

As of May 21, more than 14,000 North Koreans were employed at 23 South Korean factories producing items such as textiles, watches and cosmetic cases.

The minimum monthly wage is $50 for each employee as well as $7.50 for social insurance. The wages are paid to the North Korean state and not directly to workers.

CHARGES OF EXPLOITATION

In May 2006 Jay Lefkowitz, the top U.S. official for human rights in North Korea, raised concerns about possible worker exploitation at the complex. Lefkowitz said the well-intentioned project may simply end up providing funds that prop up the North Korean regime. South Korea rejects the criticism as biased.

DUTY-FREE EXPORT?

South Korea and the United States agreed to set up a joint committee to study allowing Kaesong products duty-free status in the U.S. market under a free trade deal struck in April. South Korea says future projects in the North will be entitled to the same privilege. Washington is less enthusiastic.

FUTURE PLANS

South Korea’s vision for the Kaesong project, which began in June 2003 with first batch of goods shipped to South Korea in 2004, includes more than half a million North Koreans employed by 2,000 firms and with hotels, golf courses and a “peace park”.

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Posted in International trade, Kaesong Industrial Complex (KIC), Labor conditions/wages | Comments Closed

Venturing into North Korea

Tuesday, May 22nd, 2007

CNN (Hat tip to D”S”B)
Adam Levine
5/22/2007

Hiking on North Korea’s Mount Kumgang gives you the uneasy feeling that despite the majesty of the natural scenery, even nature cannot escape politics in one of the most closed-off countries in the world.

The four-hour walk to Kuryong Falls is the centerpiece of the Mount Kumgang resort in southeastern North Korea. The trail winds along a river with glistening pools of water and picturesque scenery all around.

But you never escape the country’s dictatorship — there is the propaganda carved into the mountainside and rocks by the North Koreans, and the Chinese before them. There are also the North Korean employees working as vendors and rescue workers on the trail. They are always in pairs, and always seem to be watching you.

Kumgang is a popular tourist destination for South Koreans, for whom the mountain holds spiritual allure, and it is one of the few places in North Korea that Americans can travel relatively easily.

Hyundai Asan, an offshoot of the Korean car company, built the resort. It paid the North Korean government US$1 billion for 50 years of exclusive rights to the region and other business interests in North Korea. It spent an additional US$400 million to build the five-hotel resort, which opened in 1998.

More than 1.5 million visitors have made the trip to Kumgang. Most visitors are South Koreans; less than 8,000 visitors are from 48 other countries. Hyundai Asan spokesman Dan Byun says a majority of the 8,000 are South Korean ex-patriots.

Despite the western style hotel accommodations, American money changing hands and duty free shop selling Johnny Walker and Marlboro cigarettes, you don’t forget that you are in North Korea.

Just getting there involves busing through the demilitarized zone, where we are constantly told “no pictures, no pictures” by our guide and informed that aside from the road we are on, the entire area is filled with land mines.

After going through North Korean immigration we are herded back on a bus and reminded again that we cannot take pictures until we get inside the resort.

The 4.5-mile trip moves through southern North Korea, which the guide says is all a military base. Soldiers appear ominously standing at attention along the road. Each carries a red flag, which, we are told, will be raised if any soldier sees one of us taking a picture. Tanks and what appear to be anti-aircraft weapons are hidden in bunkers in the hills overlooking the roads.

The actual resort area looks no different than any typical tourist destination with a welcome center, hotels, bus parking and retail stores. North Korean folk songs blare from overhead speakers in the parking lot. But surrounding it all is a fence to separate tourists from the North Korean village of On Jung Li.

A two-night, three-day tour can cost as much as US$490. There are five hotels to choose from including a beach-side hotel and floating hotel and one that used to be the vacation home of Kim Il Sung’s wife.

There are 11 restaurants, including a branch of a North Korean noodle restaurant that is an exact replica of its counterpart in Pyongyang. An 18-hole golf course is opening in the fall and there is a Korean acrobatics show that performs each night at the theater.

The government has gone to extremes to accommodate the resort, even tearing down a village and moving it and its inhabitants to make way for the welcome center and shop.

The company defends its $1 billion payment to the North Korean government as economic revitalization. Hyundai Asan built a railway and border station to allow trains to travel from Seoul, South Korea, into North Korea. After refusing to let the trains through for a long time, the North Korean government finally allowed the first train to cross the border last week.

Hyundai is also building a reunification center to allow families from both sides of the border to hold reunions when allowed.

Some North Koreans work at the resort as waiters, vendors, rescue teams and maintenance. Most wear a pin of their president on their lapel.

Most refused to be photographed, cryptically saying “no pictures while I am working.” All but a few will refuse to talk to you. The ones that did talk to us offer some glimpse into their thinking.

One rescue worker told us that the only reason President Bush has not invaded North Korea is because Bush is afraid of Kim Jung Il. A vendor told us that she likes Americans, but hates the American government.

The resort is surrounded by a fence, through which you can see villagers planting in the fields and walking down the roads. They are forbidden to come to the resort or talk to the tourists. Not that they appear to be trying.

Ashley Moore, from Oklahoma, remembers North Koreans ducking behind trees and plants.

“We weren’t allowed to speak to any of them,” Moore said.

Moore, and her boyfriend Zac Gambill took a trip to Mount Kumgang when they lived in South Korea last year.

She and Gambill went from being a bit frightened to be in North Korea to surprise about the unabashed consumerism at the resort.

“Seeing the commercialism at the resort was a real shock,” Moore said. But she never felt totally at ease.

“We got a sense of the North Korean government’s determination to convey a favorable image to the outside world and a small sense of what it feels like to be constantly under surveillance,” Moore observed.

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Posted in Economic reform, Foreign direct investment, Hoteling, Mt. Kumgang Tourist Special Zone, Special Economic Zones (Established before 2013), Tourism | Comments Closed

Due to China’s protest, North Korea’s drug production facility partly closed

Monday, May 21st, 2007

Daily NK
Han Young Jin
5/21/2007

Well-informed sources say Heungnam manufacturer’s production facility shuts down.

Several well-known sources relayed on the 20th that as North Korean drugs flow into China in large amounts, it strongly protested to North Korea and requested that the Heungnam Pharmaceutical Manufacturer in Hamheung be shut down.

Following suit, the North Korean government authorities was known to destroy the Heungnam Pharmaceutical Manufacturer used in producing bingdu (the alias for “ice” classified in the category of Philopon in North Korea).

The well-informed source said, “China’s judicial authorities are strongly coping with the situation by imposing three years of penal servitude to those who sell 10g of Bingdu (so called “Ice” in North Korea) or a penalty of 20,000 yuan. When North Korea demonstrated a lax response, China expressed strong discontent.”

In North Korea, the Nanam Pharmaceutical Manufacturer in Chungjin, North Hamkyung is famous as a representative drug manufacturing company. The source evaluated that Hamheung, which has recently risen as a drug production base, had weak means of living which produced the highest number of deaths during the 90s’ mass starvation and the stimulant “Ice” was misused due to the lack of medical products.

$3,000 per kilogram…dealt for $10,000 at the border

An internal source said, “During the March of Suffering, a part of citizens who even sold raw materials and factory equipment earned big money by selling drugs. Since then, everyone has followed the trend. The people in Hamheung started handling drugs with great ambition due to the fact that at the Heungnam Pharmaceutical Manufacturer, the prime cost for a kilogram is $3,000 dollars and the profit exceeds $5,000.”

The source said, “In the past, people touched drugs hoping to make a big fortune with a single swoop, but everyone is thinking about making money by selling drugs nowadays. Inevitably, the number of civilians who have become ‘ice’ addicts has significantly increased.”

Ice can be produced for $3,000 per kilogram and sold on site for $7-8,000 and at the border region where smuggling is possible, it can be sold for up to $10,000.

Another source said, “Civilians have fallen to the bedazzlement of making a jackpot with drugs, so they have gone to the border region carrying drugs and seeking dealers. However, fakes that have been manufactured ingeniously are also making a wave.”

In North Korea, as drug sales have been unyielding, it was known that teenagers who are touching “ice” are not only seriously in Hamheung but in all regions. They are not showing immediate signs of addiction, but they can be presumed as “high-risk” people for addiction.

North Korean businessman Mr. Kim, who is engaging is trade between North Korea and China, wore a sorry expression and said, “Nowadays, children who are not yet fully grown use ‘ice.’ Not too long ago, my friend’s 12-year old son was found while secretly using his father’s ‘ice.’ After severely beating him, the father asked, “Do you like ‘ice’ so much? The son responded, ‘it is a cure-all.’”

In the mid-1990s, due to deteriorated medical facilities and a shortage of medical goods, citizens started to depend on folk remedies. Civilians who started using ‘ice’ in lieu of cold medicines started using it as emergency medicine even for the flu and strokes.

Mr. Kim said, “Ice has a stimulant quality, so it is used to as a stimulant and a stress-releaser. Even children have come to regard it as a panacea and think that a little suck of ice will instantly get rid of pain and make one refreshed.”

Narcotic squads hardly have any strength

The North Korean authorities issued a narcotics degree in March of last year to prevent drug abuse. It has even issued the threat of putting to death related parties of drug deals. However, businesses that have earned money through drugs feed bribes to inspection organs, so sources said that these institutions cannot exert any strength.

One domestic source said, “Recently, a Central Party inspection group was organized in Shinuiju and came forward to regulate drugs, but authorities such as the National Security Agency, the National Security Office, and others have become implicated. However, exposing them in increasing measures makes punishment difficult, because complicit individuals can come forward in hordes.”

Drug sellers in the border region have divided left-over profits from handing over to China with participating National Security officers. The source said, “If a drug dealer is arrested, if back-money is given, even the ring-leader will be immediately released.”

The source also said that upper-class drug inspection groups can instantly become conspirators due to the high amount of money to be handed over to their superiors.

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Posted in Black markets, China, Drug smuggling, Health care, Illicit activities, International trade, Pharmaceuticals | Comments Closed

North Korean Won dropping in value

Monday, May 21st, 2007

Institute for Far Eastern Studies
5/21/2007

Recently, the cost of living for North Koreans has become increasingly burdensome, as the value of the North Korean won (KPW) has steadily fallen. This phenomenon has been observed since the introduction of the July 1st measures in 2002, but the toll on poorer citizens is growing as money is concentrated in the hands of the elite.

A decent jumper jacket from China sells for 30,000 to 50,000 won, a kilogram of meat for 3,000 won, and a bottle of cooking oil for 2,700 won. North Koreans tell of taking 100,000 won to the market and, having only made a few purchases, leaving with an empty wallet.

Every month, a family of four requires 50 kilograms of rice (50,000 KPW or 1,000 won per kg) and 20 kg of corn (7,000 KPW or roughly 350 won per kg). On top of this, the expense of buying supplementary food items such as cooking oil, red pepper flakes, vinegar, garlic, and scallions is almost equivalent to the price of rice.

One North Korean woman (hereafter referred to as Ms. Kim) who sells noodles at the Hweryung Nammun market estimates her living expenses at 60,000 won per month. Ms. Kim, a housewife responsible for a family of three, earns about 2,000 to 3,000 won a day selling noodles. This amounts to roughly 60,000 won a month, which only covers food expenses. She cannot even dream of buying rice, let alone saving up to raise seed money for a business, as her income goes toward supplementary items like corn (23,000 KPW for 70 kg), cooking oil (2,700 KPW), and beans (950 KPW for 1 kg).

Ms. Kim’s husband, who works at the Hweryung machine factory, receives a monthly salary of 4,000 won. This money is only enough to buy four kilograms of rice. Ms. Kim started selling noodles ten years ago, when it became clear that relying on her husband’s income would end in starvation for her family. She said that she has not put meat on the table for her child in a long time, as it is difficult to afford even one kilogram a month. With the exception of merchants who trade with overseas Chinese, workers who earn foreign currency, and those with relatives in China, the majority of Hweryung’s residents live day to day.

With the recent order from the Ministry of Public Security to “cease selling, as rations will be provided starting in April,” local markets have come under stricter regulation. This regulation has had the effect of raising the price of goods manufactured in China. Before the restriction, transactions took place at stalls and impromptu shops, but now buyers must hunt down merchants, which has led to a rise in prices.

On a related note, the dollar’s weak performance in the international market has been reflected in the North Korean black market. The exchange rate remains pegged at one dollar to eight Chinese yuan, but the rate of the North Korean won to the dollar and to the yuan changes daily. North Korea does not have a fixed exchange rate, because individuals who offer money exchange services occasionally receive information on currency rates from China. Due to the dollar’s recent weakness, the rate of the North Korean won to the dollar as well as to the yuan has been falling for several months.

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Posted in 2002 Economic reforms, Agriculture, Clothing, Fiscal & monetary policy, Labor conditions/wages, Manufacturing, Price liberalization | Comments Closed

N. Korean former premier relegated to company manager: sources

Friday, May 18th, 2007

Yonhap
5/18/2007

North Korea’s former Prime Minister Pak Pong-ju has been relegated to the chief administrative manager of the communist country’s largest chemical complex, informed sources said Friday.

In April, the North replaced Pak, who oversaw the country’s threadbare economy, with then Transport Minister Kim Yong-il. Pak is believed to have been in conflict with senior North Korean officials over the introduction of an incentive-based system.

Pak has since been working as the manager for the synthetic fiber complex in South Pyongan Province. The complex resumed operations in 2002. North Korea spent about US$10 billion to build the complex more than a decade ago, but it was hardly operated until recently.

“High-level North Korean economic officials staged a lobbying war not to be appointed prime minister as the premier has no real power and becomes the scapegoat for the North’s worsening economy,” a source said on condition of anonymity.

Saddled with a severe food shortage, North Korea said it will make all-out efforts to raise its people’s standard of living this year by concentrating on light industry and agriculture.

In a session of its parliament, North Korea said its major economic goal is “to improve the living standards of people on the basis of the existing foundations of agriculture and light industry.”

In a recent meeting with U.N. World Food Program officials, a North Korean vice agriculture minister acknowledged that the communist country has a shortfall of about 1 million tons of food and called for aid from the outside world.

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Posted in Economic reform, Political economy | Comments Closed

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