North Korean Economy Watch

KCNA
5/8/2007

The national scientific and technological festival commemorating the 95th birth anniversary of President Kim Il Sung was held from May 3 to 7 at the Three-Revolution Exhibition. 

The 22nd festival of this kind took place in the forms of a symposium on latest scientific and technological achievements, a presentation of results of scientific researches, a presentation of achievements in technical innovation and a diagram show. 

Officials, scientists, technicians and working people across the country presented achievements, experiences and many scientific and technical data attained in the course of the massive technical innovation movement at local scientific and technological festivals. 

At least 570 items of data of scientific and technological results highly appreciated there were made public at 18 sections of the national festival. 

During the festival the participants introduced achievements in agriculture and light industry and valuable scientific and technological data helpful to revitalizing the national economy and lifting to a high level the technical engineering of such major fields as IT and nanotechnology, bioengineering and basic sciences and widely swapped experiences. 

Five persons carried away special prize and 53 top prize at the festival. 

The closing ceremony of the national festival took place on Monday. Present there were Choe Thae Bok, secretary of the C.C., Workers’ Party of Korea, Ro Tu Chol, vice-premier of the Cabinet, Pyon Yong Rip, president of the State Academy of Sciences, and others. 

The decision of the jury of the festival was made public at the closing ceremony and the festival cups, medals and diplomas were awarded to those highly appraised. And prize of scientific and technological merits went to seven officials who had given precious help to scientists and technicians and presented materials of new research results to the festival. 

A closing speech was made by Pak Yong Sin, secretary of the Central Committee of the Korean General Federation of Science and Technology.

KCNA
5/7/2007
The 10th Pyongyang Spring International Trade Fair will be held at the Three-Revolution Exhibition from May 14 to 17. 

Participating in it will be companies from the DPRK, China, Russia, Syria, the Netherlands, Germany, Bangladesh, Switzerland, Singapore, Australia, Italy, Indonesia, Pakistan, Poland and Taipei of China. 

Machine tools, electric and electronic equipment, vehicles, medicaments, daily necessities, foodstuffs and so forth are to be on display in the fair.

Joong Ang daily
5/7/2007

South Korea agreed late Friday to send North Korea raw materials that it can use in its light industries, but scheduled it to happen June 27 ― after next week’s scheduled test-run of an inter-Korean railroad, the Unification Ministry said.

The South could halt the shipment if the North cancels the test, as it has done several times in the past.

“At the economic talks for the light industry projects and the railroad projects, North Korean officials repeatedly said the train tests will occur this year,” a South Korean official who refused to be named said yesterday. “I am not sure if they had reached a consensus with the military or not, but their statements were very decisive.”

The two Koreas will hold general-level military talks from Tuesday to Thursday to guarantee the safety of passengers and trains that will travel across the demilitarized zone.

On Friday, South Korea agreed to begin the shipment of raw materials, worth $80 million, on June 27.

Yonhap
5/23/2007
Koreas fail to agree on details for swapping of raw materials, resources

South and North Korea on Wednesday failed to settle remaining differences over how to boost cooperation in light industry and natural resource development, the Unification Ministry said.

“The two sides just agreed to continue to discuss details regarding the issue,” the ministry said in a statement. The ministry did not provide details about when they will meet again.

Working-level officials could not agree on the list and price of raw materials the South is to provide the North in exchange for the right to develop natural resources in the communist country.

The North called for more than the South has earmarked for the shipment on the last day of the two-day talks held in the North Korean border city of Kaesong, according to South Korean officials.

Last month, South Korea agreed that it will provide raw materials to the North in June to help revive its threadbare light industry in return for the North’s natural resources. The two Koreas reached a similar swapping agreement in 2005, but it has not been implemented due mainly to the North Korean nuclear dispute.

In the agreement, the rice shipment, which will consist of 150,000 tons of domestic rice and 250,000 tons of imported rice, will be sent to the North late this month in the form of a loan to be paid back over the next 30 years with a 10-year grace period. Seoul hopes to link it with Pyongyang’s promise to take initial steps toward nuclear disarmament.

Last Tuesday, the South Korean government endorsed the spending of funds needed to provide rice and raw materials for light industry to North Korea. The South’s planned shipment of 400,000 tons of rice is worth US$170 million, while the provision of raw materials for light industry is worth $80 million.

In 2005, South Korea agreed to offer raw materials to the North to help it produce clothing, footwear and soap starting in 2006. In return, the North was to provide the South with minerals, such as zinc and magnesite, after mines were developed with South Korean investments guaranteed by Pyongyang.

But the economic accord was not implemented, as North Korea abruptly cancelled the scheduled test runs of inter-Korean railways in May last year, apparently under pressure from its powerful military.

Last Thursday, two trains crossed the Military Demarcation Line for the first time since the end of the 1950-53 Korean War. But critics said the test run of two railways, one in the east and the other in the west, is not likely to lead to the formal opening of the railways or to rail services for a joint industrial complex in Kaesong or for tours of the North’s Mount Geumgang.

As part of efforts to accelerate the formal opening of the inter-Korean rail service, the South plans to sound out the possibility of providing raw materials via reconnected railways during the working-level dialogue or the upcoming ministerial talks.

Koreas hold talks on swapping of raw materials for light industry
Yonhap
5/22/2007

South and North Korea on Tuesday held talks to work out details for boosting cooperation in light industry and natural resource development, the Unification Ministry said.

The aim of the working-level dialogue, being held in the North Korean border city of Kaesong for two days until Wednesday, is to focus on procedures for the South’s shipment of raw materials to the North in exchange for the right to develop North Korea’s natural resources.

During the talks, South and North Korea are scheduled to exchange agreement documents, which will then take effect immediately since the two sides successfully conducted test runs of cross-border railways, a precondition for the implementation of the accord, government officials said.

The South also plans to sound out the possibility of providing the materials via reconnected railways in a prelude to the formal opening of the inter-Korean rail service, according to sources.

“We are studying various ways of speeding up the formal opening of the Gyeongui (Seoul-Sinuiju) and Donghae (East Coast) tracks. The use of the tracks for the promised shipment of light industry raw materials could be an option,” a government source said, asking to remain anonymous because of the sensitivity of the issue.

On Thursday, trains crossed the Military Demarcation Line for the first time since the end of the 1950-53 Korean War. But critics said the test run of two railways, one in the east and the other in the west, is not likely to lead to the formal opening of the railways or to rail services for a joint industrial complex in Kaesong and tours of the North’s Mount Geumgang.

Earlier this month, South Korea said it will ship the first batch of light industry materials to the North via ship on the Incheon-Nampo route, but the mode of transportation for the rest has yet to be decided.

Last month, South Korea agreed that it will provide raw materials to the North in June to help revive its threadbare light industry in return for its natural resources. The two Koreas reached a similar swapping agreement in 2005, but it has not been implemented due mainly to the North Korean nuclear dispute.

In the agreement, the rice shipment, which will consist of 150,000 tons of domestic rice and 250,000 tons of imported rice, will be sent to the North late this month in the form of a loan to be paid back over the next 30 years with a 10-year grace period. Seoul hopes to link it with Pyongyang’s promise to take initial steps toward nuclear disarmament.

Last Tuesday, the South Korean government endorsed the spending of funds needed to provide rice and raw materials for light industry to North Korea. The South’s planned shipment of 400,000 tons of rice is worth US$170 million, while the provision of raw materials for light industry is worth $80 million. The approval will be promulgated on Tuesday.

In 2005, South Korea agreed to offer raw materials to the North to help it produce clothing, footwear and soap starting in 2006. In return, the North was to provide the South with minerals, such as zinc and magnesite, after mines were developed with South Korean investments guaranteed by Pyongyang.

But the economic accord was not implemented, as North Korea abruptly cancelled the scheduled test runs of the railways in May last year, apparently under pressure from its powerful military.

 AFP
 Philippe Agret
 5/2/2007

SARIWON, North Korea (AFP) – To cope with the pouring rain, the hospital tossed sawdust down the stairway leading to the operating theatre.

Two surgeons washed their hands in a sink, but sometimes they lack soap.

Much like the rest of North Korea, a political pariah and economic black hole, the nation’s hospitals subsist with whatever they can get their hands on, making ends meet with obsolete equipment, short-cut procedures and a smattering of foreign assistance.

Even by the standards of the developing world, the facilities here in Sariwon, a 45-minute drive south of the capital Pyongyang, leave much to be desired.

The medical equipment is largely German or Soviet, reused as long as possible, but spare parts are desperately lacking.

“As we lack sufficient or working equipment, we use local anaesthesia and acupuncture for operations,” said the director of the Sariwon hospital, Dr Choe Chol, a surgeon.

In winter, surgeons operate in rooms where the temperature is lower than five degrees Celsius (41 Fahrenheit).

To improve conditions, the doctors and nurses pitch in themselves to make the hospital work, sometimes even laying down the tiling in the operating theatres.

“We do our best here. There’s no bleach, no soap, no disinfectant. We cleanse with distilled water. It’s the volunteers — the doctors and nurses — who regularly do the cleaning up,” said Veronique Mondon, the North Korea head of the French charity Premiere Urgence.

Premiere Urgence is one of only six foreign non-governmental organisations allowed to work in the Democratic People’s Republic of Korea.

Like others NGOs, the group has set a goal of bringing the most basic treatment to the population — but also to encourage North Koreans to develop their own medical infrastructure.

Premiere Urgence’s primary effort has been producing intravenous drips — one of the only medical supplies made in North Korea — for the 12 hospitals where it works.

With 70 to 80 percent of the medicine in North Korea coming from overseas donations, the IV drip — in the form of a packet with a solution of distilled water, glucose and sodium — serves to ease the impact of the lack of supplies.

“These packets can be used for a great number of the medical problems in North Korea such as accidents, malnutrition, dehydration, diarrhea, typhus and hepatitis. They save lives,” said Mondon, a biologist who opened Premiere Urgence’s branch in North Korea in April 2002.

If IV drips are effective, their production is a daily challenge. The packets must be sterilised on site in the most sanitary conditions possible, a process that takes about three and a half hours.

In light of the instability of the electricity and frequent short power cuts, Premiere Urgence has brought in specially made transformers from China.

“The people in the laboratories work during the night to produce the packets so as to save the electricity for the sick people and operations during the day,” Mondon said.

“It was tough at first. It seemed to be an insurmountable task. But now, the North Koreans know that this is needed,” she said.

After the April 2004 disaster in the northern city of Ryongchon, when a cargo train blew up, killing more than 160 people and wounding a thousand others, Premiere Urgence worked round the clock to produce IV drips and distributed 40,000 of them to two hospitals that were treating victims.

Today, the laboratory in Sariwon produces 300 IV drips a day — enough to treat more than 200 patients in this 750-bed hospital.

Across North Korea, Premiere Urgence produces 500,000 packets a year, each one worth around 50 US cents.

The French group has also set up a central laboratory in Pyongyang for quality control over injectable solutions.

North Korea’s communist leadership adheres to the homegrown ideology of “Juche” — self-reliance and self-sufficiency.

But at least hundreds of thousands of people died in a famine in the 1990s and North Korea has since relied heavily on foreign assistance — notably for food — despite continued political defiance, including its test of an atomic device in October.

From the International Committee of the Red Cross (ICRC) to the few NGOs in North Korea, all encourage local initiatives in an effort to prevent a culture of dependence.

Premiere Urgence plans eventually to hand over the maintenance of equipment and training of technical staff to the North Korean ministry of public health.

As for the ICRC, as well as helping produce 1,200 prosthetic limbs in 2006, it has focused efforts on training local people, including orthopaedic specialists and surgeons.

“North Korea’s pharmaceutical industry will never be able to develop if humanitarian groups flood North Korea with foreign medicine. It will continue to vegetate and manufacturer substandard products if foreigners do not buy local medicine,” said Felix Abt, a Swiss businessman who heads PyongSu Pharma JV. Co Ltd., one of the first foreign joint ventures in North Korea.

Pyongsu has set up a “model” pharmacy in Pyongyang and since September 2004 has run a factory with 30 employees manufacturing paracetamol, the pain relief drug sold under name brands such as Tylenol, along with aspirin and antibiotics.

Abt hopes one day to be able to export medicine from North Korea.

“For now, we are giving the North Koreans fish. It would be better to give them nets so they can catch fish,” Abt said.

Korea Times
Ryu Jin
4/30/2007

At a quarter to 7 a.m. on a normal weekday, a rush to work opens the morning of a North Korean town seated just minutes away from the heavily fortified border with South Korea.

Several blue commuter buses, just like ones that can be seen in downtown Seoul, stop in front of a sign reading, “Kaesong Industrial Zone’’ and spew out hundreds of North Korean workers.

As the working time draws near, they hasten their steps toward their respective workplaces, owned and managed by people from across the border. Some 13,000 North Korean workers, mostly women in their 20s and 30s, spend most of the daytime in the small capitalist enclave in the southwestern part of their Stalinist nation.

“Welcome!’’ “Good Morning!’’ Several South Koreans say as they greet their North Korean colleagues in front of the main gate of Shinwon Ebenezer. Hwang Woo-seung, director of the apparel company’s Kaesong branch, says that they have never skipped a day _ regardless of rain or snow _ without such greetings since the factory went into operation in 2004.

Closing hours are by and large around 5 p.m. But almost half of the 13,000 laborers work overtime until 7 p.m. in order to return home early on Saturdays. By the first half of 2008, the number of North Koreans working in the joint industrial park is expected to reach 100,000, according to South Korean officials.

From Seeds to Young Plants

Launched three years ago, the Kaesong Industrial Complex has been a gauge of the situation on the Korean Peninsula, where hundreds of thousands of troops confront each other across the border, which remains as the last flashpoint of the Cold War era.

Operations, for example, had nearly stopped late last year in the wake of a nuclear test by the North. Since the Feb. 13 denuclearization agreement, however, businesses have gone back to normal.

A free trade agreement (FTA) struck in April between South Korea and the United States, which opened up the possibility of the Kaesong products being exported to America as “made in Korea’’ goods, also breathed a fresh enthusiasm into the industrial zone.

Foreign eyes watching the complex are also changing. A growing number of foreign delegates are coming to the zone, and their evaluation has been quite positive. Moody’s Investors Service analysts Thomas Byrne, who visited the site on Feb. 9, said Kaesong is the “optimistic future’’ of South and North Korea.

Currently, 22 firms _ mostly small- and medium-sized ones _ are making clothes, shoes, watches and kitchen pots in the 1 million-pyong (3.3 million-square-meters) pilot site of the Kaesong complex, which will sprawl over a total 20 million-pyong (66 million-square-meters) in the coming years.

Since the first products came out in December 2004, annual output has increased from $14.9 million (13.8 billion won) in 2005 to $73.7 million (68.4 billion won) in 2006.

Despite potential risks stemming from political uncertainty, the zone has an inescapable economic logic _ the cheap labor and land of the North combined with the capital and technology of the South.

Proximity also makes for an attractive alternative for South Korean firms looking to move their plants to China. The distribution cost in Kaesong is one-tenth that of China, land price one-fifteenth and the labor cost one-twentieth, according to statistics.

Some 300 companies are expected to fill up the whole first-stage experimental site by the first half of next year, hiring up to 100,000 North Korean workers.

“It means that an up-and-coming new city is being created in the border area with a total population of about 300,000 to 400,000, when the families of the workers are added,’’ says Kim Dong-keun, chairman of the Kaesong Industrial District Management Committee (KIDMAC).

Kaesong hopes to invite as many as 3,000 companies eventually, employing some 350,000 workers by the mid-2010s, when the fully-fledged complex (roughly the same size of Changwon) is completed with apartment buildings, hotels, shopping centers and even an amusement park and golf courses.

Way to Integration

North Korea, for its part, envisions Kaesong as its own version of Shenzhen, one of the first “special economic zones’’ in China, and hopes that the new industrial site could jump-start its near-bankrupt economy.

Since the mid-1990s, when it was severely hit by great famines amid the first nuclear standoff with the United States, North Korea has remained a wasteland plagued by the so-called triple distresses _ the shortage of food, cash (foreign exchange) and energy.

With the end of the Cold War, North Korea lost hefty aid from China and the now-defunct Soviet Union, which had propped up its flagging economy. In a desperate move, Pyongyang launched an experiment with the free market in July 2002, deregulating prices and hiking salaries.

North Koreans had also anticipated the businesses with South Korea, which started in the wake of the historic inter-Korean summit in 2000, to bring money into the cash-strapped country.

But the ambitious tour project at Mt. Kumgang above the eastern side of the border had been too fainthearted to turn profitable because it was limited only to tourists.

Kaesong was a different story. While South Koreans saw the tour project largely as symbolic, they were ready to offer more financial incentives for companies to invest in the border town.

For the South Korean decision-makers, Kaesong became the site of an experiment to transplant capitalism to the Stalinist state, plagued by an inefficient bureaucracy and pervasive malnutrition.

Of course, the venture poses risks for the tightly controlled hermit kingdom, which has been ruled by hereditary “monarchs’’ _ the late leader Kim Il-sung and his son Kim Jong-il _ for more than half a century. A major city with about 150,000 residents, Kaesong will inevitably be exposed to what the North Korean leadership calls decadent Western culture.

Suh Ye-taik, an executive director of Hyundai Asan, selected by the North as its major business partner, recalls that it was an offer that nobody expected when the North Koreans first proposed Kaesong. Pyongyang originally wanted to develop other places such as Shinuiju and Haeju.

“It was an unexpected offer in political terms,’’ he said. “But we decided to opt for Kaesong in consideration of the proximity and other conditions of location.’’

Kaesong, seated about 140 kilometers south of Pyongyang and some 60 kilometers north of Seoul, is on a point of strategic importance in the case of a military conflict between the two Koreas. North Korea even yielded some kilometers by withdrawing its conventional artillery.

Kim Jong-il, however, seems to be well aware of the fact that his own hold on power depends on reviving the economy. Kim Heung-kwang, a defector from the North who had worked as a professor at Pyongyang Computer Technology University, predicted in a recent thesis to the Korea Institute of Science and Technology Information (KISTI) that North Korea would open up the Internet to individuals as early as 2009.

“Security guarantees and restoration from the economic plight are the top priorities for the survival of the North Korean regime,’’ said Yang Moo-jin, a professor at the University of North Korean Studies in Seoul. “They realize opening is the only way out of their predicament.’’

While Kaesong is a touchstone for economic integration in the unification process, the workplaces in the industrial zone are test boards for cultural and societal assimilation of the two Koreas, which have walked different paths for the past several decades since the 1950-53 Korean War.

Shinwon is a good example. South Korean managers say they now see drastic changes in the attitudes of North Korean workers. People from across the border had kept an awkward silence in the first years. But smiles and small chatter has become part of the atmosphere.

“The quality of the products here is good because the Northern workers are very productive,’’ said Hwang, the head of the apparel company’s Kaesong factory. “They now learn skills much faster than they did in the initial years.’’

They are also getting familiar with dialects from the other side of the border. In the three-storied factory of Stafild that produces medical walking shoes by some 1,800 North Korean workers, visitors overheard “One for all, all for one’’ _ the motto of the Stalinist state.

For Brighter Future

While its ambition is grand and lofty, the Kaesong complex still faces major hurdles _ both from inside and outside. One of the biggest problems is the U.S. economic sanctions against North Korea, which ban the sale or shipment of key strategic goods such as high-tech computers.

Though the South Korean government is trying to attract the investment of some information-technology (IT) companies in the long term, no high-tech firms have so far advanced in to Kaesong.

So, what the zone really needs is a genuine political thaw between North Korea and the U.S., government officials as well as experts point out. A strong inter-Korean relationship is another important factor to affect the joint project.

Labor conditions in Kaesong are a problem of its own. The average wage is only $57.50 per month, which is not provided in cash. North Korean workers receive coupons to get the necessities of life, though their standard of living is much higher than those in other areas of the country.

Largely focused on red brick industries, which led the economic growth of the South until the 1980s, some workplaces in the zone are exposed to dangerous environments and workers are not entitled to the core labor rights, such as the right of collective action.

Foreign investment will be a touchstone of the venture’s success in the long term. South Korea plans to invite U.S. investors to the industrial estate in October in an effort to expedite foreign investment.

“Foreign investment will help stabilize the operation of the industrial complex and will be a good experience for the management of other firms,’’ said Kim Dong-keun, the KIDMAC chairman.

South Korean officials also expect that from now on some large South Korean enterprises will come into the zone to continue the development of the Kaesong industrial park.

“So far, the zone has been occupied largely by small- and medium-sized companies,’’ Unification Minister Lee Jae-joung said at a breakfast lecture late last month. “We expect the international credit rating of Kaesong will improve if leading enterprises move in.’’

On April 27, the National Assembly of South Korea passed a law that supports the industrial zone. Firms operating in Kaesong will be provided with the same benefits enjoyed by the small- and medium-sized companies in other areas such as a 7-percent tax exemption. South Korean workers in Kaesong will also be eligible for the Labor Standard Act and the country’s four major insurance policies.

“Kaesong Industrial Complex is a win-win situation for both the South and the North,’’ Kim said. “Both economies will complement each other through the project and will be the steppingstone to national unification and integration.’’

DOWNLOAD IT HERE (to your own Google Earth)

Using numerous maps, articles, and interviews I have mapped out North Korea by “industry” (or topic) on Google Earth.  This is the most authoritative map of North Korea that exists publicly today.

Agriculture, aviation, cultural, manufacturing, railroad, energy, politics, sports, military, religion, leisure, national parks…they are all here, and will captivate anyone interested in North Korea for hours.

Naturally, I cannot vouch for the authenticity of many locations since I have not seen or been to them, but great efforts have been made to check for authenticity. In many cases, I have posted sources, though not for all. This is a thorough compilation of lots of material, but I will leave it up to the reader to make up their own minds on the more “controversial” locations.  In time, I hope to expand this further by adding canal and road networks. 

I hope this post will launch a new interest in North Korea. There is still plenty more to learn, and I look forward to hearing about improvements that can be made.

Korea Herald
4/23/2007

South Korea and the United States have agreed not to apply International Labor Organization regulations to an inter-Korean industrial park in North Korea’s border city of Gaeseong, a South Korean lawmaker claimed yesterday.

Kim Won-woong, head of the National Assembly’s unification, foreign affairs and trade committee, said the Gaeseong industrial park is certain to remain an exception to the ILO’s labor rules, paving the ground for Seoul and Washington to designate Gaeseong as an “outward processing zone” (OPZ) on the Korean peninsula.

Gaeseong, located just north of the inter-Korean border, currently houses 23 manufacturing plants, which combine South Korea’s capital with North Korea’s cheap labor.

Under an FTA deal concluded at the beginning of this month, South Korea and the United States agreed to set up a joint OPZ review committee that will identify areas in North Korea that might be designated as OPZs and consider their qualifications if they meet the necessary criteria, including labor and wage practices. But the labor sector was expected to pose a dilemma as North Korea is not a member of the ILO, which stipulates three basic labor rights, namely the right to unionize, collective bargaining and industrial action.

“South Korea and the United States agreed to consider North Korea’s non-ILO member status and unique labor circumstances in the designation of OPZs in the communist state,” said Kim, citing a document he obtained from the Foreign Affairs and Trade Ministry.

In related news, the two Koreas agreed yesterday at the 13th economic cooperation talks in Pyongyang to continue discussing how to fortify the operations at the industrial complex from next month.

Gaeseong park is considered a signature inter-Korean project symbolizing the efforts of expanding exchanges.

South Korea, under the engagement policy of President Roh Moo-hyun, aims to gradually open up North Korea towards market economy for an eventual reform.

Daily NK
Kim Young Jin
4/16/2007

The North Korean authorities ordered that the holiday gifts given to North Korean citizens for 4.15 Kim Il Sung’s birthday, Sun Day, be distributed by each provincial body.

The leader of a people’s unit Mr. Choi of a district in Hyesan, Yanggang said in a phone conversation with Daily NK on the 13th, “The order came from the center to supply liquor and sweets through the body.”

He said, “A ‘4.15 subdivision committee’ has been organized in each province and has been going down to the commercial offices and food factories to directly inspect production.” The committee is a team that exists for the people who were temporarily transferred from party and political organizations for the seasonal production of sweets for distributing to children on Kim Il Sung’s birthday

This order’s intention can be interpreted as North Korean authorities trying to raise the holiday atmosphere by sparking competition among the provinces to celebrate Day of the Sun as “the year of victory in Military First Ideology.”

”The manager who cannot even provide one bottle of alcohol is not entitled”

However, the central party provided the order without a realistic plan of action, leaving it in the hands of factory and enterprise offices.

Another well-informed source stated that, “The central party has sparked a competition amongst the provinces to see which municipality provides more.”

On the 80th birthday anniversary of Kim Il Sung in 1992, when the “Supply Diversification” competition was kindled, the news spread that Junchun Commercial Office in Jakang, to where Jung Chun Sil (a member of Supreme People’s Committee) belongs, supplied 13 kinds of socks, candles, matches, and alcohol, but most of the provinces stopped after passing out one bottle of drink.

The well-informed source also stated that more than one bottle of drink could not be distributed this time. Soju is an item which cannot be left out from the holiday provision. Each provincial organization was known to bluff. “Factory managers who cannot provide at least one bottle of drink should forfeit their positions.”

At a food factory producing drinks, 10 hours of electricity was provided and the factory entered production round the clock, but it still had difficulty due to the lack of electricity and raw materials.

Demand-driven supply is also insufficient. After supplying drinks produced at this factory to organizations of influence, coal and mine workers, and laborers who work in dangerous jobs, there is not enough for all citizens.

As a result, authorities are asking factory and enterprises offices themselves to provide the laborers. Most factories are ordering from individual home-brew traders.

Failure in “gift” production for children

In the midst of this, it has been known that units which have taken charge of production of gift-use sweets are in a state of panic.

A part of the provinces used corn taffy and substituted corn instead of flour because of the lack of candy powder (sugar). Also, provisions had to be completed by April 13 to 14th, but the production line could not operate due to the lack of electricity, so goods could not ensure within the planned time.

Until the early 1990s, the central party promised flour, sugar, and other materials, but due to the worsening of financial difficulties, it decreed that provinces themselves take care of these goods. After the 65th birthday anniversary of Kim Il Sung in 1977, North Korea provided sweets to pre-school students who are at least five-years old to 11-year old elementary school students as a way of boosting their devotions but under the pretext of “gifts.”

Defector Mr. Kim reflected, “I can remember, after going up one by one to receive gifts, approaching the portraits of Kim Il Sung and Kim Jung Il and bowing. In 1970-1980, the snacks and sweets were at least 10 different kinds, but now, there is only corn snack and one package of candy.”

Daily NK
4/14/2007
Park Hyun Min

Changes to the North Korean Cabinet Ministry, Kim Young Il elected as the new Prime Minister, Kim Young Choon as Vice-Chairman of the National Defense Commission

At the 5th round of the 11th Supreme People’s Assembly announced on the 5th, the change in economic policies that would in future concentrate on the people’s livelihood and suspend the advancement of technological skills.

In the report, the deputy Prime Minister revealed that the major economic task for the upcoming year included light industries and agriculture, which had already been completed, and the improvement of the people’s livelihood. He said that the issue of social economic management had been discussed and that it would be resolved “our way.”

The 2007 report by the Supreme People’s Assembly proposed to, i) improve the basic standards of living in relation to agriculture and light industries, ii) enhance the manufacture of potential energy starting with the prioritizing the department into 4 divisions, iii) modernization of public economy and iv) manage sosicalistic economy through the our own.

Furthermore, foreign collaboration was proposed to further investments into advanced technology. In relation, the third phase proposal was made over a 5 year period (`08~`12) to improve technological skills such as the advancement of basic skills, high technology and software.

In contrast to last year, North Korea estimated an increase in revenue at 433.2bn won ($30.9bn, $1=141won). Last year, 5.9% were considered the public revenue, whereas this year, this figure was raised to 7.1%.

As for tax resources, national business gains tax was increased to 6.4%, cooperative organizations fund set at 4.5%, depreciation amount 9.6%, real estate fees 15.4%, and social welfare tax at 15.1%

Regarding expenses, science-technological skills among people’s economic expense increased to 60.3%, net business income is estimated to be 2% which will aid new measures to develop enterprise skills. In addition, proposals were made to increase agricultural expenses to 8.5%, light industries to 16.8%, energy, coal, metalwork and railroad to 11.9%

In relation to this, a South Korean governmental official revealed, “At this Supreme People’s Assembly, economic improvement proposal was mainly revealed without any announcement on foreign policies or sort of legislation of reform or openness.

Since last year, there have been rumors that a change in government would occur amidst the North Korean Supreme People’s Assembly. While Park Bong Joo stepped down from his position, Kim Young Il, formally in charge of transportation was elected as the new prime minister. It has been three and half years since Park Bong Joo first took his prime ministerial post at the first round of the 11th Supreme People’s Assembly in September 2003.

Former Prime Minister Park is known to have ceased his duties since last year June. He has been suspected of transferring money from the agriculture’s oil funds. At the 20th High Level Cabinet Talks in Pyongyang in February, a South Korean representative did mention that Prime Minister Park had made a welcoming speech. However, it seems that he has been ousted from his position.

Additionally, with the death of Yeon Hyung Mook in October 2005, Kim Young Choon is known to have succeeded the position of Vice Chairman as well as taking on the role of military counselor.

Regarding, the new appointments, a governmental official said that the Cabinet’s Prime Minster, Kim Young Il would aim to solve the economic issue while Kim Young Choon as the new Vice Chairman would aim to organize the structure of the ministry and strengthen the military.

While Kim Jong Il did not attend the last round of meetings, the fact that he participated in the recent meeting has also gathered much interest.