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North Korean State Party’s CC meeting: of fired officials and coronavirus efforts

Monday, March 2nd, 2020

By: Benjamin Katzeff Silberstein

On Saturday February 29th, the Political Bureau of the Central Committee of the Korean Worker’s Party held a so-called “enlarged” meeting. According to the KCNA report, the meeting dealt primarily with purges of corrupt officials, and coronavirus measures:

At the enlarged meeting acts alien to the party, abuse of power, practices of privileges, indulgence in bureaucracy, corruption and irregularities revealed among senior officials of the Party Central Committee and officials of the Party cadre training institution were harshly criticized and their gravity and consequences were sharply analyzed.

The Supreme Leader clarified the analysis of the issues by the Party Central Committee and its stand on them, and dealt strong blows at the acts alien to the party and unpopular and anti-socialist acts brought up for discussion at the meeting. He called on all the Party officials and organizations to draw a serious lesson from the recent incident, to make steady efforts to revolutionarize themselves and their units and bring about a new turn in the Party work.

The Political Bureau of the Party Central Committee dismissed Ri Man Gon and Pak Thae Dok from the posts of vice-chairmen of the Party Central Committee.

The meeting adopted a decision to disband the party committee of the Party cadre training base which was involved in the practices of corruption and irregularities, and to impose relevant penalty.

It’s not clear precisely what “strong blows at the acts alien to the party and unpopular and anti-socialist acts”, but presumably it refers to corruption. Corruption is one of the most common acts for WPK-officials to get purged (or fired) over, and the formulations indicate that this is indeed what happened here. Some have suggested it may have had to do with shoddy work in the country’s coronavirus measures, but even reading carefully between the lines, I can’t see enough evidence to back that up. “[A]cts alien to the Party” [비당적 적행위],  I would argue, is a clear statement about specific acts particularly alien to the Party’s values. Shoddy handling of specific policy implementation related to the virus does not fall naturally into that category. Moreover, the antivirus measures were praised at the very same meeting. North Korean politics is full of contrasts and mixed messages, but this would be a stretch too far.

The problem with these methods, of course, is that they do nothing to address the long-term issue of corruption. The WPK (and the North Korean state for that matter) lacks institutions for accountability and independent oversight. There is no proper justice system in any reasonable sense of the term. So scare campaigns and setting examples, like the CC meeting in question did, really is the only avenue available. These measures might have some positive impacts in the short run – we don’t know – but in the long run, they make little difference. Kim Jong-un has ostensibly made anti-corruption a priority, but so far, campaigns and sporadic crackdowns are the only visible results. Corruption is obviously bad for the economy, but if it helps people get around draconian laws (as is the case in North Korea) to do business, it might be a net positive for the economy.

The meeting also dealt with North Korea’s efforts to contain the coronavirus. There’s a lot to say about the text, I’ve highlighted (in bold) the part relating to economic affairs:

Discussed at the meeting were issues of taking nationwide top-class anti-epidemic steps in a more thorough-going way and strictly putting them into practice in order to cope with the viral epidemic spreading rapidly around the world.

In case the infectious disease spreading beyond control finds its way into our country, it will entail serious consequences, the Supreme Leader said, noting that the strong measures taken by our Party and the government from the beginning have been the surest and highly reliable, preemptive and decisive preventive measures as this viral infection spreads so rapidly, its incubation period is uncertain and its contagion route is also scientifically uncertain.

An urgent task at present is to supplement and complement the law on the state emergency anti-epidemic and to readjust state crisis control regulations in an orderly way, the Supreme Leader said, emphasizing that the Presidium of the Supreme People’s Assembly, the Cabinet and other related institutions must further strengthen the state anti-epidemic force immediately and push ahead with the work for supplementing and complementing anti-epidemic means, system and laws based on the experiences gained through the on-going enforcement of preemptive and powerful anti-epidemic measures to cope with infectious disease.

The enlarged meeting also discussed measures to deter the influx and spread of the infectious disease in a scientific, preemptive and lockdown way.

No special cases must be allowed within the state anti-epidemic system, the Supreme Leader said, stressing the need to set up a strict discipline by which all the fields and units of the country unconditionally obey to the command and control of the Central Headquarters for the emergency anti-epidemic work and thoroughly execute instructions from it, and to further tighten the system of reporting to the Party and legal surveillance.

He instructed the Cabinet and the Central Emergency Anti-epidemic Headquarters to seal off all the channels and space through which the infectious disease may find its way, and strengthen check-up, test and quarantine under the work system and order already in place.

The meeting also stressed the issue of tightening economic organization and anti-epidemic work under the prevailing situation and conditions so as to accomplish this year’s goals without fail and to thoroughly ensure the life and security of the people.

It is important for the Party organizations at all levels to have clear understanding of the intention of the Party Central Committee and put it into practice, the Supreme Leader said, urging the need for the Party to provide an impetus so that the Cabinet and the economic institutions at all levels could provide proper economic operation and command under the present situation.

The anti-epidemic measures being taken by us is a crucial state affair for the defence of the people and a heavy responsibility of the Party Central Committee, not just the prevention of the disease, the Supreme Leader said, underlining the need for all to thoroughly carry out the decisions and instructions of the Party Central Committee and direct all-out efforts to the security of the country and the life and safety of the people.

The question is, of course, what this means in practice. There is no doubt that the economy is suffering, and not just in terms of sheer growth numbers or the like. Much of North Korea’s imports from China are blocked due to the border closure, and even smuggling is facing heavy clampdowns. Internal travel and movement of goods is heavily restricted. There is, it seems to me, fairly little that the state can really do to balance this all in terms of economic measures, but of course, the state must tell the population that it is doing things and taking action.

(Source: Korean Central News Agency, “Enlarged Meeting of Political Bureau of C.C., WPK Held,” 29/2/2020.)

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Posted in Central Committee, China, Coronavirus, Economic reform, Health care, International trade, Political Bureau | Comments Closed

North Korea strengthens internal travel restrictions to keep the coronavirus in check

Friday, February 28th, 2020

By: Benjamin Katzeff Silberstein

Daily NK  has reported on the travel restrictions inside the county before, as this blog has covered here and here. This recent report goes into greater detail:

“The No. 2 departments in local Ministry of People’s Security [MPS] offices are placing further restrictions on the issuing of travel documents, and the authorities are cracking down on vans shuttling people around for money,” a Kangwon Province-based source told Daily NK today.

“No. 10 sentry posts [managed by the Ministry of State Security, or MSS] are cracking down on buses and other vehicles moving people. Even local police stations have setup temporary checkpoints to conduct crack downs on vehicles transporting people,” the source added.

It seems like we’re not talking about a blanket ban on travel across provincial borders per se. Rather, the state is banning and heavily restricting certain forms of transportation, especially unauthorized kinds (which otherwise are often  tacitly tolerated, not least through institutionalized bribery). This, too, impacts market trade since the transportation sector is crucial to shuttling goods around the country.

The authorities are thoroughly preventing any vehicles or people from transiting from the border region to the interior of the country and the other way around, sources told Daily NK.

Sources said that anyone who has entered the country from abroad but doesn’t have a document certifying they have been tested for the coronavirus are restricted from travelling. Merchants without proper travel documentation are also reportedly being targeted by the authorities. Even work units involved in construction projects are being restricted from moving around, sources said.

[…]

No. 2 departments in local MPS offices are restricting the issuance of travel documents to everyone unless they are on government orders, Daily NK sources further reported.

Even factory officials who need to travel to other places of the country to collect raw materials have been told to wait until “later” (after the COVID-19 crisis passes over), sources said.

The authorities are also carefully checking container trucks and the baggage compartments of buses for people hitching a ride in these hidden spaces, they added.

There are gaps, however, in the lock down on travel that the authorities are trying to implement.

“Some vehicles, including taxis, are cleverly selecting routes to avoid checkpoints,” the Kangwon Province-based source said.

“People are wearing masks just to avoid getting stopped by the authorities,” he added.

The border regions are of course especially targeted. The state knows it cannot fully close the border shut and thus needs internal controls to be forceful. The mention of certification of testing is interesting and implies that there are ways individuals can take action to test themselves. Perhaps it refers to the medical test teams reportedly dispatched to the border to China.

“There are a lot of ‘storm troopers’ in Kangwon Province who hail from all over the country, which means there’s a lot of people moving around,” the Kangwon Province-based source said. “The authorities can’t completely shutdown the province from the outside because the shock troops need to move supplies into the area for construction projects, but they are setting up multiple check points to block as much traffic as they can.”

The state still needs to continue running its daily affairs, and it’s unclear to what extent construction projects and other things that may be hampered by internal controls have been put on hold. This must be a bureaucratic nightmare to coordinate and often, one hand of the state doesn’t know what the other is doing.

Article source: Kang Mi Jin, “N. Korea further strengthens restrictions on domestic travel,” Daily NK, 27 February 2020, accessed 28 February, 2020.

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Posted in Black markets, China, Coronavirus, Economic reform, General markets (FMR: Farmers Market), Health care, International trade, Transportation | Comments Closed

North Korea and the coronavirus: why internal controls may be working

Tuesday, February 25th, 2020

By: Benjamin Katzeff Silberstein

At this point, it seems unlikely that not a single case of the coronavirus would have reached North Korea, despite government media claims. The border to China is quite porous even when controls are tight, and the provinces bordering North Korea had seen, as of last week, some 200 cases. The government has ordered schools shut for one month starting five days ago, on February 20th. Unsurprisingly, it has taken special care to protect Pyongyang from the virus, and face mask distribution goes first to the one percent.

The economic effects of all this are very troubling. As this blog has previously noted, markets and society overall seem to be taking the border closure much more seriously than sanctions, and have reacted with much more anxiety than when new rounds of sanctions measures have been levied by the international community in the past. Prices have climbed quite drastically, as we shall look at in some detail in this post. They have risen by much more in Hyesan than in the rest of the country, which tells us something interesting about the government’s internal controls. That differences in market prices are increasing could be a sign that internal controls on travel across provincial boundaries are being enforced quite effectively. When traders cannot as effectively move their goods to where demand is the highest, prices will increase. One also has to bear in mind that Hyesan is very dependent on trade with China to begin with, and we should therefore expect prices there to increase disproportionately.

(My apologies for the awkward look of the graphs — please click for full size!)

In normal times too, prices tend to be higher in Hyesan than in other cities. But usually not by that much. Notice what happens around  January, though: prices skyrocket all over the country but they do so by much more in Hyesan.

This is particularly evident when we look at price differences. Normally, prices are between 5–10 percent higher in Hyesan than in both Pyongyang and Sinuiju. Since the border closure, however, they have gone beyond 20 percent over both cities, according to price observations from the past few weeks. 
Again, the border closure to China may be a central part of the explanation. But rice itself isn’t typically a good that North Korea relies so much on Chinese imports for. We don’t know the precise proportions, but likely, most rice consumed in North Korea in an ordinary year is grown within the country. A likely conclusion is, therefore, that the closure of provincial borders within North Korea is being enforced with some efficiency, making it much more difficult for market traders to transport goods such as rice between different markets in the country. This adds to the already stark economic difficulties from the closure of the border to China. Many other prices have risen drastically as well: gas prices in Hyesan are now 46 percent higher than in late December of last year, and 38 percent higher in the country as a whole. The government has attempted, reportedly with some success, to institute price controls on the markets, but as the story goes with such state attempts in general, they are unlikely to last as black markets arise to respond to shortages.

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Did North Korea really see its best harvest “on record last year?

Friday, January 17th, 2020

By: Benjamin Katzeff Silberstein

As I and Peter Ward discovered some weeks ago, the claim by Kim Jong-un that North Korea had its “best harvest on record” did not make it into the English-language summary of Kim’s plenum speech put out by KCNA. Several media outlets have picked up on this claim, and that is not surprising. Not even a year ago, last spring and summer, both the North Korean government and UN organs sounded the alarm bells that North Korea’s harvest was so disastrous as to suggest a famine might be looming.

So what happened?

First of all, it should be noted, as always, that one must be extremely cautious in studying data on anything related to the North Korean economy. Most people who follow North Korea are well aware of this but especially when it comes to an issue like this, one cannot be cautious enough.

I focus here on the claim by Kim that the harvest was the best “on record”. It may well have been a good harvest, or at least a much better one than anticipated. This seems to be the case. The only attempt I’ve seen at a numerical estimate comes from South Korea’s Rural Development Administration. They estimate that North Korea’s harvest grew by around two percent in 2019 over 2018. This sounds fairly plausible and could perhaps be explained by weather conditions unexpectedly improving, or fertilizer donations from China, and the like. Or the government and FAO’s projections were simply wrong from the beginning.

To understand why it is so unlikely that this year’s harvest would be the best on record, we have to look at what ‘the record” really says. The following graph shows North Korean harvest figures between 1990 and 2017, as recorded by the FAO. These figures are not independently recorded or verified but, to the best of my knowledge, generated by FAO in cooperation with the North Korean government, or provided directly by the government. Usually, that would be a problem, but here, it’s actually quite helpful since it helps us analyze the claim about the “record”.

Graph by NK Econ Watch/Benjamin Katzeff Silberstein. Data source: FAOSTAT.

I downloaded these numbers from the FAO database some months ago. For whatever reason, I’m unable to access the data at their website at this time of writing, and therefore, can’t fill in the data further back. This data also differs somewhat from other data on North Korean harvests from the World Food Program and FAO. Still, they match quite closely with other data the two organizations have published in recent years about North Korean food production. Again, keep in mind that this data is produced and published in concert with the North Korean government. In that sense, these numbers are the “record”.

Over the past few years, estimated harvests have gravitated between four and five million tons in milled rice equivalent.  (You can read more here about what that actually means.) In 1993, North Korea’s record of harvests notes 7.5 million tons. Harvests hovered around 8 million tons in the 1980s – again, to the best of my recollection, as I can’t access the FAO statistics database numbers of North Korea at this time of writing.

Graph by NK Econ Watch/Benjamin Katzeff Silberstein. Data source: WFP/FAO. 2019 is a projected figure.

For Kim’s claim to be true, therefore, this past year’s harvest would have had to go from around five million tons in 2018, to surpassing eight million tons in 2019. I am no agricultural economist, but Kim would likely need something like a miracle of nature for this to happen. I am not aware of North Korea’s landmass suddenly doubling, for example, or the amount of arable land increasing by one third overnight. Therefore, Kim’s claim is most likely, beyond reasonable doubt, simply not true. Note also that outlets such as Daily NK have reported that the government has taken predatory measures against grain trade as a result of what the outlet describes as “poor agricultural yields”.

In other words, there is very little to back up the claim made by Kim (and subsequently by North Korea-affiliated Choson Sinbo). This claim is a break with a pattern over the past few years, where North Korean media has been very frank – often, probably exaggerating – in describing difficulties and damage caused by flooding and inclement weather. There are several reasons why this may have changed with regards to the harvest. For one, food security a very basic need for any country. With bad food security, North Korea appears weak in the face of sanctions. It would hardly be the first time the North Korean government lied for strategic, propaganda purposes. It is also possible that harvests were much better than anticipated, and that Kim’s claim is merely a strong exaggeration. Perhaps “best on record” should be read as a superlative, rhetorical claim rather than a literal one. At the end of the day, we simply don’t know, and the ways of the inefficient North Korean bureaucracy are mysterious.

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Posted in Agriculture, China, Economic reform, International Aid, Statistics | Comments Closed

How the North Korean government manages the economy

Thursday, August 8th, 2019

By Benjamin Katzeff Silberstein

One of the most poorly understood aspects of policy change in North Korea in the past few years is the extent to which the North Korean government manages the economy in some ways like any government would in a market economy. Consider, for example, this story by Daily NK:

Amidst signs that housing prices in North Korea are falling due to economic stagnation, the authorities are assessing the state of the housing market in order to implement measures to stabilize the situation.

“The authorities recently began a survey of housing prices and will likely intervene in transactions and setting house prices,” a South Pyongan Province-based source told Daily NK.

The authorities have also begun to set prices for land designated for urban housing plans as part of efforts to control housing transactions, the source added.

These efforts are ostensibly aimed at setting an upper limit for house prices, but the authorities have yet to announce any official numbers.

The aim appears to be to prevent price spikes and ensure that buyers and sellers can conduct transactions within a stable housing market.

In North Korea, the state traditionally owns all land and housing by law, which is supposed to mean that the government provides housing to its citizens without any monetary transactions.

After the widespread famine in the 1990s, however, residents acquired the “right to use” housing and began conducting housing transactions on the basis of market prices. Even before the economic crisis, North Koreans in the upper class engaged in housing transactions on the black market, although such transactions could typically be considered a form of housing “trade.”

These changes came about because North Koreans began proactively taking advantage of the “right to use” housing. Essentially, the authorities gave them the right to inherit and transfer the ownership of the houses they lived in, and North Koreans actively bought and sold these rights on the market.

“The authorities have invested a massive amount of money in building new housing and these efforts have led to an increase in ‘donju’ who have made money out of the projects,” said the source. “The authorities probably thought they needed to step in and control the housing market because of the sheer number of new apartments.”

Full article and source:
Government conducts survey on housing prices in North Korea
Jang Seul Gi
2019-08-05

Now, we still know very little about how these market interventions may come to work. The state just stepping in and fixing prices may be it, but measures like that tend not to work for long.

Consider, also, this story about how the government may come to lower market stall operations fees on some markets. The reason cited is the general economic downturn (presumably following sanctions). In lowering fees, the North Korean government is doing what most governments would do in that situation: launching a fiscal stimulus, of sorts. By lowering taxes (because that’s essentially what these fees are), the government is hoping to stimulate economic activity.

Whatever language it may use to describe how the economy works, this is market management, albeit not of a very sophisticated kind.

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Daily NK on foreign currency shortages

Thursday, August 8th, 2019

Benjamin Katzeff Silberstein

This is an interesting article by Daily NK. It highlights how little we actually understand about how the exchange rate works in North Korea. Basically, their sources say that foreign currency is available in increasingly short supply, but confirm that despite reports to the contrary, exchange rates haven’t moved noticeably:

Sources report that sanctions have reduced the flow of foreign currency into and out of the country, while the amount in circulation has further fallen because residents are hoarding it. While foreign currency is still being used to pay for major transactions, residents are increasingly using local currency to pay for daily items in the local markets.

“North Koreans are using local currency more often to buy things at the market. They’d prefer Chinese yuan or US dollars, but there’s just not enough of it in circulation to use,” a source in South Pyongan Province told Daily NK.

“There are concerns that the situation could lead to an increase in counterfeit bills circulating in the country.”

“International sanctions have definitely led to a fall in circulating foreign currency,” added a North Hamgyong Province-based merchant in his 40s. “The authorities implement measures to entice people to use foreign currency at particular shops and restaurants, or demand that the wealthy make donations to the regime’s loyalty fund, but there’s no avoiding the fact that the circulation of foreign currency has fallen compared to a couple of years ago.”

“There are rumors that the Arduous March [widespread famine of the mid-1990s] is returning, so people are trying to save up and not spend anymore,” he said, adding that broader forces are at play.

Despite the developments, the exchange rate remains relatively stable. Generally, a fall in foreign currency in the market would lead to an increase in the value of foreign bills and a rise in the exchange rate. But the exchange rate between the US dollar and North Korean won has fluctuated only slightly at 1 USD to 8,000 North Korean won, while the exchange rate between the Chinese yuan and North Korean won has remained at 1:1200.

However, if there is an increase in the use of foreign currency in the markets while the overall circulation of foreign bills continues to fall, it could lead to a significant impact on exchange rates.

Article source:
North Koreans turn to local currency due to foreign currency shortages
Ha Yoon Ah
Daily NK
2019-08-06

I’ve written quite a few times about how all this is possible. Logically, it is. That doesn’t make it less of a mystery.

If current conditions continue, I’d be very surprised if we don’t see a sharp fall in the won soon enough. But then again, the market has defied a lot of reasonable, logical expectations already…

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Market fees may be lowered on some North Korean markets

Tuesday, July 30th, 2019

Benjamin Katzeff Silberstein

Daily NK:

“Merchants working in the markets feel that business this year is worse than last. I’m not sure if the authorities were thinking about the merchants when they made the decision, but it’s good that they have reduced the taxes in Pochon, Sinpa and Kimhyongjik County,” said the source in Ryanggang Province during a telephone interview.

According to the source, market fees in Pochon and Sinpa County are relatively low compared to other areas. The fees for industrial goods were reduced from 1000 won to 500 won. Fees charged to vendors of food and ice cream were lowered from 500 won to 300 and 200 won, respectively.

The market fees are determined based on the size of the city, the size of the stall and the type of product being sold. The rough national average fees being charged per day as of early this year was 1500-2000 KPW for meat stalls, 1000-1500 KPW for industrial products (clothes) and 500-1000 KPW for food and vegetables.

According to the Center for Strategic and International Studies’ analysis of markets in North Korea, the authorities collect over $56 million USD per year from the markets. The largest market in North Korea, Sunam Market in Chongjin, generates an estimated $840,000 USD for the government.

Before the markets were formally recognized, market fees were 3-5 won until the early to mid 1990s, before being raised ten-fold in 2001, to 30-50 won. After the regime legalized the country’s private markets in 2002 with its ‘New Economic Management Improvement Measures,’ the fees rose another ten-fold.

Source:
Market fees in North Korea set for reduction in parts of border region
Kang Mi Jin
Daily NK
2019-07-30

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China’s Xi promised funding for bridge connections in North Korea, reports say

Tuesday, July 30th, 2019

By Benjamin Katzeff Silberstein

This is quite interesting, and hardly surprising. Overall, I’ve seen very little to suggest that China regards the current sanctions pressure as anything but a temporary measure. That would fit the historical pattern well. (For more on this, feel free to check out my chapter on Trump’s “maximum pressure” strategy and its impacts on the North Korean economy.) This time is very different because of the longevity and extent of the Chinese sanctions pressure, but in nature, I don’t believe China’s medium- to long-term strategy on North Korea and sanctions has changed. Talk of China “abandoning” North Korea, which used to be rife when Chinese trade data on North Korea pointed in a downward direction, has often been and remains much overblown.

The news is that Xi Jinping, during his June visit to North Korea, supposedly promised that China would fund facilities on the North Korean side of the new-ish border bridge between southwestern Dandong, as well as fund work on the Hwanggumpyong SEZ. Asahi Shimbun:

China has promised to foot the bill for the construction of related facilities for an already-completed bridge across the border between China and North Korea, sources said.

Chinese President Xi Jinping made the pledge when he visited North Korea in June, they said.

During the visit, Xi also promised that China will promote construction of an economic development zone on North Korea’s Hwanggumpyong Island in the Yalu River, which forms a natural border between the two countries, the sources added.

Construction of the bridge and the economic development zone were agreed on when former North Korean leader Kim Jong Il was still alive. But the projects were effectively frozen after his son and successor Kim Jong Un became the country’s leader.

Xi’s willingness to pay the costs of building an access road to the bridge on the North Korean side of the border, as well as customs-related facilities, suggest that economic relations between the two neighbors are moving to a firmer footing.

According to sources knowledgeable about trade between the two countries and those with links to North Korean authorities, Xi’s promises were conveyed to high-ranking North Korean government officials during meetings to report on the outcome of a summit meeting between the two countries.

Xi’s largesse was also shared in the North Korean military as it will be involved in the construction of bridge-related facilities as well as the economic development zone.

The New Yalu River Bridge connects Dandong in China with Sinuiju in North Korea. Although the bridge has been completed, it is not yet open to traffic.

China will provide about 2.5 billion yuan (39 billion yen, or $360 million) for the construction costs. Chinese engineers have been conducting field surveys since late June.

Since around that time, the upper parts of the bridge have been lit up at night.

In mid-July, cars carrying Chinese government officials traveled to a border gate in the middle of the bridge.

Construction of the bridge started in 2011 when Kim Jong Il was in power. China spent about 1.8 billion yuan in construction costs. The bridge was completed in 2014 under Kim Jong Un’s regime.

Source:
China to fund costs so bridge to North Korea can open to traffic
YOSHIKAZU HIRAI
Asahi Shimbun
2019-07-29

On the North Korean side, the bridge has been lacking a connection to the broader road network (or to anywhere, really) since construction began in 2011, as these pictures show:

The new Yalu river bridge, October 1st, 2011. Image from Google Earth/Digital Globe.

The new Yalu river bridge, March 2nd, 2019. Image from Google Earth/Digital Globe.

Overall, this emphasizes the reality that China really is the only country that North Korea has close, substantive and sustainable trade links with. It was truly unlikely that Xi’s visit to North Korea would occur without any promises for economic benefits or the like. Kim Jong-un’s visits to China have rendered similar benefits, though perhaps not of the same economic magnitude.

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Posted in China, Foreign direct investment, Hwanggumphyong and Wihwado Economic Zones (Sinuiju), International trade, Special Economic Zones (Established before 2013) | Comments Closed

North Korea’s (April) constitutional revision and economic change

Friday, July 12th, 2019

By Benjamin Katzeff Silberstein

A quick comment on the reported change of the North Korean constitution (back in April): I don’t have access to the revised version as of now (or a working VPN from Seoul…). But judging by the reporting by outlets like Hankyoreh (here), this seems like a quite important confirmation that changes in the economic governance system of enterprises in North Korea continues and is still seen as a priority by the state:

The publication of the full text of North Korea’s constitution, which was amended back in April, reveals that language about the “Taean Work System,” its traditional party-centric method of managing the economy, has been replaced by language about the “Responsible Management System for Socialist Corporations,” which increases the autonomy of managers at production sites and introduces market elements. This creates a constitutional basis for Kim Jong-un’s reform-oriented approach to the economy. The amended constitution also adds an expression about the chairperson of the State Affairs Commission “representing the state,” which effectively constitutes a formal declaration that Kim Jong-un, as chair of the State Affairs Commission, is the “head of the state.” The constitution was amended during the first session of North Korea’s 14th Supreme People’s Assembly, on Apr. 11, but the full text wasn’t released to the outside world until now.The full text of all 171 articles of North Korea’s revised “socialist constitution” was released on Naenara, a North Korean foreign propaganda outlet, on July 11.

Article 33 of the constitution says that “the state shall execute the Responsible Management System for Socialist Corporations in economic management while ensuring the correct use of economic spaces such as production costs, prices, and profitability.” This replaces language in the previous version of the constitution that read, “The state shall execute a self-supporting accounting system in line with the demands of the Taean Work System while ensuring the correct use of economic spaces such as production costs, prices, and profitability.” The key change here is a shift in the state’s economic management method from the Taean Work System to the Responsible Management System for Socialist Corporations. The constitutional amendment also adds language to Article 33 about “decisively increasing the role of the cabinet” in the management of the economy.

(Source: Hankyoreh, July 12th, 2019)

Why is this important?

In short, because these bureaucratic processes often stall. Kim Jong-un’s first few years in power saw a virtual flurry of new frameworks introduced for economic governance, most of them enshrining and institutionalizing rules and practices that had already been in place in much of the country for a while. Still, government recognition for these practices really matters, because at the very least, it indicates they won’t be curtailed or rolled back for a while. But this flurry appears to have ceased from around 2016 or so, or at least decreased in intensity and scope. Some have argued that some in the government may not have seen the results they anticipated on economic growth, and therefore turned their attention elsewhere. Including a strong reference to enterprise management autonomy may not indicate a change per se, but at the very least, it confirms that the broad strokes of the changes that have already happened seem to still be generally embraced by the government.

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Renewable energy power plant for Sinuiju modernization project

Friday, June 21st, 2019

Benjamin Katzeff Silberstein

Daily NK reports:

“A massive renewable energy power plant was built to deal with the chronic lack of electricity in North Pyongan Province,” a source in North Pyongan Province told Daily NK. “The power plant now supplies Sinuiju and other areas of the province.”

Meari, a North Korean propaganda outlet, published an article on June 2 entitled “The Construction of a Renewable Energy Power Plant that Produces 1,000 kW by the North Pyongan Province Electricity Department.”

The article states that a “renewable energy power plant was built on around a 300 square meter lot on the lower part of the Yalu River” and that “The Electricity Department built around 3,600 solar panels, electricity transformers, and electric cables to ensure the continued, self-sufficient supply of electricity.”

The source told Daily NK that the Workers’ Party of Korea (WPK) and government officials in North Pyongan Province made the decision to embark on the construction of the new power plant. Officials emphasized the use of renewable energy and new ways to supply electricity to the province.

A separate source in North Pyongan Province said that the decision to move forward with the project led to the construction of an “electricity base” with wind power and solar panels in the Sinuiju area.

“They are now moving forward with expanding the existing infrastructure by four-fold,” he said.

[…]

The Rodong Sinmun published an article on March 20 entitled “Let’s Imitate Them [North Pyongan Province’s Electricity Department] and Widely Develop and Use Renewable Energy.” The article states that the Electricity Department in North Pyongan Province “recently constructed a massive renewable energy power plant that is supplying electricity to important areas in Sinuiju and the local people.”

Source:
Renewable energy power plant built for Sinuiju modernization plans
Mun Dong Hui
Daily NK
2019-06-21

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Posted in Energy, Hwanggumphyong and Wihwado Economic Zones (Sinuiju), Sinuiju International Economic Zone, Sinuiju Special Administrative Region | Comments Closed

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