Archive for the ‘DPRK Policies’ Category

DPRK scores last place in economic freedom (again)

Tuesday, January 16th, 2007

Heritage 2007 Index of Economic Freedom

North Korea’s economy is 3% free, according to our 2007 assessment, which makes it the world’s least free economy, or 157th out of 157 countries. North Korea is ranked 30th out of 30 countries in the Asia–Pacific region, and its overall score is the lowest in the world.

North Korea does not score well in a single area of economic freedom, although it does score 10 percent in investment freedom and property rights. The opening of the Kaesong industrial venture in cooperation with South Korea has been a start in foreign investment.

Business freedom, investment freedom, trade freedom, financial freedom, freedom from corruption, and labor freedom are nonexistent. All aspects of business operations are totally controlled and dominated by the government. Normal foreign trade is almost zero. No courts are independent of political interference, and private property (particularly land) is strictly regulated by the state. Corruption is virtually immeasurable and, in the case of North Korea, hard to distinguish from necessity. Much of North Korea’s economy cannot be measured, and world bodies like the International Monetary Fund and World Bank are not permitted to gather information. Our policy is to give countries low marks for specific freedoms when it is country policy to restrict measurement of those freedoms.

Background:
The Democratic People’s Republic of Korea has maintained its Communist system since its founding in 1948. A serious economic decline began in the early 1990s with the end of economic support from the Soviet Union and other Communist-bloc countries, including China. Floods and droughts all but destroyed the agricultural infrastructure and led to severe famine and dislocation of the population during the 1990s. South Korean and Chinese investments in the economy have alleviated dire conditions. The government continues to rely on counterfeiting foreign currency and sales of missiles for money. That and the nuclear ambitions and isolationism of Kim Jong Il reinforce North Korea’s status as the hermit kingdom.

Business Freedom – 0.0%
The state regulates the economy heavily through central planning. The economic reforms implemented in 2002 allegedly brought some changes at the enterprise and industrial level, but government regulations make the creation of any entrepreneurial activities virtually impossible. The overall freedom to start, operate, and close a business is extremely restricted by the national regulatory environment.

Trade Freedom – 0.0%
The government controls all imports and exports, and formal trade is minimal. Data on North Korean trade are limited and compiled from trading partners’ statistics. Most North Korean trade is de facto aid, mainly from North Korea’s two main trading partners, China and South Korea. Non-tariff barriers are significant. Inter-Korean trade remains constrained in scope by North Korea’s difficulties with implementing needed reform. Given the lack of necessary tariff data, a score of zero is assigned.

Fiscal Freedom – 0.0%
No data on income or corporate tax rates are available. Given the absence of published official macroeconomic data, such figures as are available with respect to North Korea’s government expenditures are highly suspect and outdated.

Freedom from Government – 0.0%
The government owns all property and sets production levels for most products, and state-owned industries account for nearly all GDP. The state directs all significant economic activity. The government implemented limited economic reforms, such as changes in foreign investment codes and restructuring in industry and management, in 2002.

Monetary Freedom – 0.0%
In July 2002, North Korea introduced price and wage reforms that consisted of reducing government subsidies and telling producers to charge prices that more closely reflect costs. However, without matching supply-side measures to boost output, the result of these measures has been rampant inflation for many staple goods. With the ongoing crisis in agriculture, the government has banned sales of grain at markets and returned to a rationing system. Given the lack of necessary inflation data, a score of zero is assigned.

Investment Freedom – 10.0%
North Korea does not welcome foreign investment. One attempt to open the economy to foreigners was its first special economic zone, located at Rajin-Sonbong in the northeast. However, Rajin-Sonbong is remote and still lacks basic infrastructure. Wage rates in the special zone are unrealistically high, as the state controls the labor supply and insists on taking its share. More recent special zones at Mt. Kumgang and Kaesong are more enticing. Aside from these few economic zones where investment is approved on a case-by-case basis, foreign investment is prohibited.

Financial Freedom – 0.0%
North Korea is a Communist command economy and lacks a private financial sector. The central bank also serves as a commercial bank with a network of local branches. The government provides most funding for industries and takes a percentage from enterprises. There is an increasing preference for foreign currency. Foreign aid agencies have set up microcredit schemes to lend to farmers and small businesses. A rumored overhaul of the financial system to permit firms to borrow from banks has not materialized. Because of debts dating back to the 1970s, most foreign banks will not consider entering North Korea. A South Korean bank has opened a branch in the Kaesong zone. The state holds a monopoly on insurance, and there are no equity markets.

Property Rights – 10.0%
Property rights are not guaranteed in North Korea. Almost all property belongs to the state, and the judiciary is not independent.

Freedom from Corruption – 10.0%
North Korea’s informal market is immense, especially in agricultural goods, as a result of famines and oppressive government policies. There is also an active informal market in currency and in trade with China.

Labor Freedom – 0.0%
The government controls and determines all wages. Since the 2002 economic reforms, factory managers have had more autonomy to set wages and offer incentives, but the labor market still operates under highly restrictive employment regulations that seriously hinder employment and productivity growth.

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No More Free Work for State

Wednesday, January 10th, 2007

Daily NK
Kim Min Se
1/10/2007

An increasing number of North Koreans now depend on markets as international aid to North Korea sharply plummeted after nuclear test, evidence shows.

Particularly, a popular “market-friendly” mind is growing as the authorities’ control over the populace is weakening.

J, resident of Hamheung, North Korea, told the Daily NK on Monday via telephone “Though TV and newspapers boast ‘military first policy’ and ‘strong nation’ after the nuke test, people are only interested in money.”

The Daily NK was able to have a telephone interview with J, who was visiting Sinuiju, a Sino-Korean border city in which electromagnetic waves of Chinese cell phones could reach. NK businesspeople often use them for communication.

J said “Hamheung citizens are well aware of the cutoff of international aid. When they were forced into serving in the public industrial labor force, they could not go to work in markets and must then starve. Therefore, they are now asking for some money instead of compensation for the loss in work when they are serving for the public work.

Originally, such work in state-run factory used to be compulsory under the industrial mobilization of workforce policy. This is the first known case of being paid in mobilized labor and evidence of spread in popular market-economy-oriented mind.

“The vulnerable died well before and those who can run are already in China or South Korea. The leftovers are hard ones; they can even plow rock mountains,” J said sarcastically.

“People don’t trust the state anymore. They live on their own.”

J, a middleman, buys TVs, radios or bicycles and sells them back in market. On lucky days, he earns up to fifty thousands NK won (equivalent to 20 US dollars). According to J, as of January 2007, rice price is ranging from 1000 won to 1100 won (less than .5 US dollar) per kilogram.

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Filling North Korea’s bare shelves

Wednesday, January 10th, 2007

Asia Times
Ting-I Tsai
1/10/2007

North Korea’s nuclear test has been a hot topic among analysts around the world. But inside the isolated Stalinist state, getting a hold of a pair of running shoes, a bicycle or a television set is still what most excites ordinary citizens.

And Chinese businesses continue to cash in on these material desires by selling goods manufactured at home or in North Korea at prices higher than their quality justifies, sparking much criticism.

When Pyongyang publicized its intention to initiate economic reforms in July 2002, most people had doubts about how far the policy would be taken. Four years later, the regime is still struggling to implement its reforms, but it has at least partly satisfied some of the daily demands of citizens by allowing more Chinese products to be manufactured in North Korea and more Chinese goods to be imported.

Shoes, bicycles, TV sets, beverages and clothes made in China or by Chinese companies in North Korea are helping to satisfy demand, but some disreputable Chinese companies are ruining their country’s reputation by dumping factory seconds and damaged goods on the market.

Over decades of isolation, North Koreans have been suffering not just from food shortages, but from a scarcity of basic consumer goods. In past years, Pyongyang has reportedly asked the South Korean government to donate thousands of tons of soap and clothes, as well as material for the production of 60 million pairs of shoes. In a visit to Pyongyang in November, products such as Colgate toothbrushes, toothpaste and a Japanese facial cleaner were carefully displayed in glass cases bearing price tags equivalent to US$2.60-$5.90, well beyond the financial reach of all but a few North Koreans.

After years of studying China’s experiences, Pyongyang is now gearing up to solicit foreign investment and advanced technologies to modernize its decades-old manufacturing base.

Supply and demand
“Because the supply can’t satisfy the demand, prices of most of the Chinese products simply soar in the North Korean market,” said Su Xiangzhong, chairman of a Tianjin company that founded a beverage-manufacturing joint venture, Lungjin, with a North Korean.

Trade between the two countries increased by 35.4% in 2004, followed by a 35.2% increase in 2005. By the end of October 2006, bilateral trade had reached $1.38 billion, a 4% increase over 2005.

Beijing-based Winner International Industries Ltd was one of the Chinese companies that foresaw North Korea’s consumption potential in 2000. By then, the company had co-founded a joint-venture running-shoe and clothing-manufacturing presence in North Korea. With advanced machinery from Taiwan, its shoe-manufacturing division is now capable of producing 8 million pairs of running shoes, according to an official from the company, who declined to identify himself. The clothing-manufacturing division, he said, has been a supplier to South Korean and Japanese companies. However, he added that orders from the two countries had recently decreased for unknown reasons.

Leather shoes for soldiers are of high quality, but they are not available to the average person. In Pyongyang shops catering exclusively to foreigners, a pair of leather shoes could cost as much as $326. The North Korean government is still soliciting foreign investment and purchasing shoemaking equipment via Chinese companies.

To get around in a country with underdeveloped public transportation, getting a pair of shoes is not enough. Taking advantage of that situation, Tianjin’s Digital Co started making bicycles in Pyongyang in October 2005, after the North Koreans agreed to let the Chinese take a 51% controlling share in the joint venture, virtually a monopoly, for 20 years.

It is estimated that the nation’s demand for bicycles is about 7 million, according to the Chinese media. The company now manufactures some 40 models and 60,000 bicycles annually, with the most popular model costing $26. In coming years, it plans to produce 300,000 bicycles annually and construct another three bicycle plants.

Aside from daily necessities, there are few entertainment options for North Koreans, which means there is a high demand for TV sets. Nanjing Panda, a TV maker, appeared to be the only Chinese company to foresee the emergence of the North Korean market when it invested $1.3 million there in 2002. After four years of operation, its 17-inch black-and-white and 21-inch color TV sets are reportedly the hottest items available in Pyongyang. With Panda products beginning to dominate the local market, it is becoming increasingly difficult for others to import TV sets into North Korea, according to Chinese business people.

The Panda joint venture is now digging up another potential gold mine by manufacturing personal computers (PCs) in North Korea.

In 2003, Chinese non-financial investments in North Korea amounted to just $1.12 million. That total, however, soared to $14.13 million in 2004, and reportedly reached $53.69 million in 2005. According to the Chinese media, there are now about 200 Chinese investment projects operating in North Korea. A Pyongyang-based foreign businessman described the Chinese investors as “by far the largest group by country doing business there, in all kinds of fields – plus they are from one of the few countries with the protection and representation of a big embassy”.

In March 2005, Chinese Premier Wen Jiabao signed an investment-protection agreement with his North Korean counterpart, and the two nations inked five bilateral economic-cooperation agreements between 2002 and 2005.

During North Korean leader Kim Jong-il’s visit to China last January, Wen introduced new economic-cooperation guidelines.

Despite these positive moves, controversy over the role of Chinese businesses has emerged. A Pyongyang-based Western businessman suggested that quite a few disreputable companies “go there with the intention of getting rid of old or damaged goods they can’t sell in China, and rip off North Koreans, who have no way to get their money back”.

“Also, a lot of fake goods come from China,” he added.

Still, more and more Chinese business people are rushing to Pyongyang. Su Xiangzhong, chairman of a Tianjin-based company, noted that his firm is creating a new beverage brand, like China’s Wahaha, in Pyongyang. North Koreans are also very interested in cooperating with Chinese enterprises in manufacturing and mining.

Chinese-made clothes for women and children, low-end and generic-brand household products and sundries, color TVs and PCs are popular products in North Korea.

Li Jingke, a Dandong-based Chinese businessman who runs the China-DPR Korea Small Investor Association, suggested that natural-resource exploitation and manufacturing are the best industries for foreigners to invest in, adding that more investment-friendly policies would likely be introduced in April. By then, he said, Chinese business people might need to become more concerned about unprofessional conduct.

“When North Korea introduces more liberalized policies, competent companies from everywhere will enter the market, which would likely eliminate the existence of those Chinese businessmen who don’t have modern commercial ideas in mind,” Li said.

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Law on Registration of Foreign-invested Enterprises

Monday, January 1st, 2007

From Naenara
Adopted by the decision No. 1530 of the Presidium of the
Supreme People’s Assembly on January 25, Juche 95 (2006)

Chapter 1. Fundamentals

Article 1. The Law of the DPRK on Registration of Foreign-invested Enterprises shall contribute to providing for a regime governing the registration of foreign-invested enterprises to offer every convenience for the registration.

Article 2. The registration of foreign-invested enterprises (hereinafter called business registration) is an important business for registering with the relevant organ the foreign-invested enterprises and their branches, agencies and representative offices, and branches, offices and agencies of the wholly foreign-owned enterprises.

The business registration shall include address registration, tax registration and customs registration.

Article 3. The address registration shall be undertaken by a provincial (or municipal) people’s committee, the tax registration by a provincial (or municipal) financial organ and the customs registration by a relevant customs office.

Article 4. The business registration in the special economic zone shall be governed by the relevant laws and regulations.

Article 5. The foreign-invested enterprises incorporated in the territory of the DPRK shall be registered with the business registrar.

The foreign-invested enterprises that have not been registered with the business registrar shall be prohibited from carrying out any business activity.

Article 6. The legitimate rights and interests of the foreign-invested enterprises that have been registered with the business registrar shall be protected by the law of the DPRK.

Article 7. A foreign-invested enterprise shall pay the commission on business registration.

Commission shall be fixed by the central financial guidance organ.

Article 8. The supervision and control over the business registration shall be done by the relevant business registrar and the supervisory and control organ.

Chapter 2. Address registration of foreign-invested enterprises
Article 9. The address registration of the foreign-invested enterprises shall be undertaken by the provincial (or municipal) people’s committee in the area where the enterprise is to be located.

The provincial (or municipal) people’s committee shall correctly register the address of a foreign-invested enterprise to be set up in the district of its jurisdiction.

Article 10. A foreign-invested enterprise should make the address registration in the name specified in the application for its incorporation. In this case, a foreign-invested enterprise should be located in the province (or municipality) where the address is to be registered.

Article 11. A foreign-invested enterprise shall send in an application for the address registration within 30 days of the approval of its incorporation, and its branch, agency or representative office within 20 days of the approval of its opening.

The branch, office or agency of a wholly foreign-owned enterprise shall complete address registration within 15 days of the approval.

Article 12. The application for address registration shall contain such particulars as the name of an enterprise, the address to be registered, the type of business, term of operation, the scheduled date for its operation, number of its staff and so on, and be accompanied by the copy of application of incorporation issued at the business registrar.

The application for address registration of a branch, agency or representative office of a foreign-invested enterprise, and a branch, office or agency of a wholly foreign-owned enterprise shall include such details as its name, address to be registered, the name of manager, term of operation, confirmation written by its head office, number of its staff, etc., and be accompanied by a letter of approval for incorporation.

Article 13. The provincial (or municipal) people’s committee shall review the application within 15 days from its receipt and issue a certificate of address registration which specifies such particulars as the date and number of registration, name and address of an enterprise, type of business, term of operation and number of its staff within 7 days after the approval of registration.

A foreign-invested enterprise that has a certificate of address registration issued may be provided with every condition necessary for such preparation of its operation as water and power supply and installation of telecommunications.

Article 14. When the application of address registration has been rejected, the provincial (or municipal) people’s committee shall give a notice of rejection specifying the reason to the applicant and the business registrar.

Article 15. In case the address registration is not able to be tendered within the prescribed period of time for unavoidable reasons, a foreign-invested enterprise shall submit an application for its extension to the relevant provincial (or municipal) people’s committee and obtain the approval from it.

The application for extension of the address registration shall specify such details as the name and address of an enterprise, the date of issue for the certificate of approval of incorporation, the reason and period for its extension, etc.

Article 16. A foreign-invested enterprise whose name and address and term of operation have been altered with the approval of the business registrar should make the registration for their alteration at the address registration organ within 10 days.

When the address to be altered differs from that of district under jurisdiction of the provincial (or municipal) people’s committee that has presented the address registration, the registration for alteration should be cancelled and the address registration be tendered at the provincial (or municipal) people’s committee in the area where the new address is specified.

Article 17. In case the certificate of address registration has been lost, due notification shall be, within 5 days, made to the provincial (or municipal) people’s committee that has presented the address registration.

The provincial (or municipal) people’s committee that has received a notification of the loss of address registration certificate should take an appropriate measure within 15 days.

Article 18. The certificate of address registration is valid for 3 years.

A foreign-invested enterprise intending to extend the term of validity for the certificate of address registration shall apply for its extension to the provincial (or municipal) people’s committee 15 days before the expiry of the term.

Article 19. When the dissolution of a foreign-invested enterprise is allowed to be approved owing to the conclusion of the term of operation and other reasons, the business registrar shall inform the provincial (or municipal) people’s committee of this matter.

Article 20. The provincial (or municipal) people’s committee that has received a notification of its dissolution shall delete the relevant foreign-invested enterprise in the register book and withdraw the certificate of address registration.

A foreign-invested enterprise whose address registration has been cancelled is not allowed to conduct its business operation.

Chapter 3. Tax registration of foreign-invested enterprises
Article 21. A foreign-invested enterprise shall submit an application for tax registration to a provincial (or municipal) financial organ within 20 days from the day of address registration.

The application for tax registration shall contain the name and address of an enterprise, total investment and registered capital, its mode of management and category of business, the name of its bank and the number of its account, term of business, the number of its employees and so on, and be accompanied by a copy of the approval of incorporation and the certificate of address registration.

Article 22. The provincial (or municipal) financial organ shall review, and approve or reject the application for tax registration within 10 days from its receipt.

When approved, the certificate of tax registration and when rejected, a notice of rejection with a reason clarified shall be sent to the applicant.

Article 23. A certificate of tax registration shall contain the name and address of an enterprise, name of manager, term of operation and category of business, name of its bank, number of its account and date and number of address registration.

Article 24. A foreign-invested enterprise that has changed the content of tax registration shall submit an application for change to the relevant provincial (or municipal) financial organ within 10 days.

The application for alteration of tax registration shall contain the name and address of an enterprise and the reason for alteration, and be accompanied by the document of approval of alteration issued by the business registrar.

Article 25. The provincial (or municipal) financial organ shall reissue the certificate of tax registration within 7 days after the receipt of the application of alteration.

Article 26. The provincial (or municipal) financial organ shall delete the foreign-invested enterprise, dissolved owing to the conclusion of the term of its operation and other reasons, in the register book and withdraw the certificate of tax registration.

Chapter 4. Customs registration of foreign-invested enterprises
Article 27. A foreign-invested enterprise shall submit an application of customs registration to the relevant customs organ within 20 days from the day of address registration.

The application of customs registration shall contain the name and address of an enterprise, the date of approval of incorporation, term of operation, category of business, the name of its bank and the number of its account, and be accompanied by a copy of the approval of incorporation, the certificate of address registration, financial guaranty issued by its bank and other documents required by the customs organ.

Article 28. The customs organ shall, within 5 days of receipt of the application for the customs registration, review and approve or reject it.

When the application for customs registration has been approved, the customs organ shall register it in the customs register book. When rejected, it shall send a notice of rejection with a reason clarified to the applicant.

Article 29. A foreign-invested enterprise that has changed the content of customs registration shall submit an application for the alteration to a relevant customs organ within 10 days.

The application for alteration shall contain the name and address of an enterprise and the reason for alteration, and be accompanied by the document of approval for alteration issued by the business registrar.

Article 30. In case the dissolution of a foreign-invested enterprise owing to the conclusion of the term of its operation and other reasons has been approved, the business register shall notify the relevant customs organ of it.

Article 31. On receipt of the notice of dissolution, the customs organ shall delete the foreign-invested enterprise in the register book.

Chapter 5. Sanctions and petition
Article 32. In case a foreign-invested enterprise failed to make registration of an enterprise or registration for alteration, fabricated a certificate of registration or continued its operation even after the cancellation of registration, the administrative penalties including fine, suspension of operation and cancellation of business registration shall be imposed.

Article 33. In case of a severe offence, criminal proceedings shall be instituted against the responsible person.

Article 34. When grievance is harbored in relation to the registration of a foreign-invested enterprise, an appeal may be filed to the Cabinet or the relevant registrar.

Any such appeal shall be settled within 20 days from the receipt of such a case.

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N. Korea Stresses Economic Revival

Monday, January 1st, 2007

Korea Times
Park Song-wu
1/1/2007

North Korea’s New Year joint newspaper editorial on Monday underlined that it will strive to modernize its economy.

The editorial also said Pyongyang will continue strengthening its defense power by focusing on “songun” or “military-first” policy that enabled it to conduct an underground nuclear test last October.

But the editorial, titled “Usher in a Great Heyday of Songun Korea Full of Confidence in Victory,” did not specifically mention Pyongyang’s nuclear plan or its relations with the United States.

As for ways to revive its economy suffering from sanctions imposed by the U.N. Security Council following the nuclear test, the editorial stressed the importance of agriculture.

“We should, as in the past, keep up farming as the great foundation of the country and make an epoch-making advance in solving the problem of food for the people,” it said.

In a reaction to the North’s emphasis on its economy, South Korea’s Ministry of Unification hoped to see Pyongyang try to improve soured inter-Korean relations to attract economic aid from the South.

“The editorial’s contents are not very much different from last year’s text, but it mentioned economic issues earlier than others,” a ministry official said, asking not to be named. “It seems that Pyongyang will pay more attention to its economy with an idea that it is now a nuclear power.”

The editorial also called for more production of consumer goods and the development of power, coal-mining, metal and rail transport industries to better the life of North Koreans.

The South Korean Ministry of Foreign Affairs and Trade interpreted the North’s failure to mention the future of its nuclear programs as an attempt to take advantage of the six-party talks that came to a halt again after a five-day meeting ended with no tangible results on Dec. 22.

“It is believed that North Korean leaders are taking a wait-and-see attitude because discussions about U.S. financial sanctions are set to resume sometime soon,” a ministry official said, requesting anonymity.

In September 2005, Washington blacklisted Banco Delta Asia in Macau as a “primary money laundering concern” because of suspicions that it was helping the North conduct illegal activities, including counterfeiting and money laundering.

As a result, the bank severed its relations with Pyongyang and froze $24 million in North Korean assets.

Regarding the presidential election to be held in South Korea in December, the North Korean editorial stressed the importance of cooperation between people in the two Koreas to get rid of conservatives in the South who used to back the United States.

The Pyongyang regime also called for loyalty to its leader Kim Jong-il, who will turn 65 this year.

The editorial was carried by the North’s Korean Central News Agency (KCNA), several hours after Kim visited the Kumsusan Memorial Palace in Pyongyang where the embalmed body of his father is kept, Yonhap news agency reported.

Kim was accompanied by several top military leaders, including Vice Marshal Kim Yong-chun, who serves as chief of the army’s general staff, and Vice Marshal Kim Il-chol, a member of the National Defense Commission and minister of the People’s Armed Forces, the KCNA said in a separate report.

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DPRK joint editorial 2007

Monday, January 1st, 2007

Every January 1, three leading DPRK publications (Rodong Sinmun, Josoninmingun and Chongnyonjonwi ) issue a “joint editorial” that is the North Korean equivalent of the “State of the Union Address”…So here are some excerpts from 2007:

Usher In a Great Heyday of Songun Korea Full of Confidence in Victory
Naerna

1/1/2007

A worthwhile advance has begun in the country at the hope-filled New Year.

Last year, 2006, was adorned as a year of great victory, a year of exciting events, in which the dawn of a great, prosperous and powerful socialist nation was ushered in.

Cheers over the victorious Songun idea and politics resounded all over the land last year.

The invincibility and rosy future of the Korean revolution rest on Songun. The army and people of Korea, under the unfurled banner of Songun, have won victory after victory in the showdown with the United States and in safeguarding socialism, and consolidated their self-defensive capabilities for the supreme interests of their country and the destiny of their nation.

That we have come to possess a nuclear deterrent was an auspicious event in the national history, realization of our people’s centuries-long desire to have a national strength no one could dare challenge. Last year’s victory testifies that our army and people were right out and out to have invariably followed the road of Songun over the past 10-odd years in the face of severest trials.

Last year was a year filled with pride, a year in which an epoch-making phase was opened for the building of a great, prosperous and powerful nation.

Gaining great confidence from the dawn of victory ushered in by the Party, our servicepersons and people waged a heroic struggle and thus achieved brilliant successes in all fields. In the tempest of the general advance of Songun revolution, the single-hearted unity of the servicepersons and people around the leadership of the revolution was consolidated in every way possible, and a springboard for a fresh leap forward in economic construction was secured.

Last year witnessed successes indicative of the resourcefulness and superiority of our nation.

Our scientists and technicians, with burning revolutionary enthusiasm and creative talent, performed exploits noteworthy in history–they broke fresh ground for the cutting-edge science and technology and consolidated the country’s strength. Our proud sportspersons achieved outstanding successes in women’s football and other international sports games, displaying to the full the mettle of the nation and bringing a great joy and encouragement to our servicepersons and people. Masterpieces demonstrating the new looks of art and literature of the Songun era were created, and traditions and customs unique to the nation greeted further efflorescence in all domains of social life.

The fact that 2006 was adorned with successes and exploits worthy of recording in the annals of our revolution and nation is a demonstration of the sagacity of our Party’s leadership.

Our Party steadfastly maintained its independent and principled stand even in the trying situation in which the country’s security faced grave challenges, and led the entire Party, the whole country and all the people confidently to a general advance for a fresh leap forward. The leadership of respected Kim Jong Il, who, by dint of correct strategy and tactics, art of outstanding leadership, and unexcelled courage and pluck, coped with the encountering challenges and turned unfavourable circumstances into favourable ones, was a decisive factor in all successes and miraculous events.

On the road of his tireless Songun-based leadership, the overall strength of our nation was remarkably consolidated and the day of a great, prosperous and powerful nation has dawned. The grand celebration last year of the 80th anniversary of the founding of the Down-with-Imperialism Union was a proud display of the fact that continuity of the Korean revolution is definitely assured by Kim Jong Il.

The true record of revolutionary activities of respected Kim Jong Il and his imperishable historical exploits of having raised the position of socialist Korea to a highest level by braving all manner of difficulties in the van holding aloft the great banner of Songun, and adorned the year 2006 as a most glorious year in the history of the building of a Juche-oriented great, prosperous and powerful country, will be handed down to posterity.

The year 2007 will be a year of great changes, a year which will usher in a new era of prosperity of Songun Korea.

Kim Jong Il said:

“It is an unshakable determination of our Party and unanimous desire of our army and people to demonstrate to the whole world the dignity of the nation by building on this land a great, prosperous and powerful socialist country which embodies the Juche idea in an all-round way.”

This year we are greeting the 95th birthday anniversary of President Kim Il Sung as a grand national event.

Kim Il Sung is the founder of socialist Korea, and the eternal Sun of Juche in the cause of the masses for their independence. The glorious history of victorious advance of our socialist Korea and today’s prosperity of Songun Korea, which is demonstrating its dignity to the whole world, are associated with his august name. We must make this year a year of greater efflorescence of his wish for a prosperous and powerful country, a year of brisk activities across the country.

The sacred revolutionary career of Kim Il Sung is a history of Songun-based leadership in that he devoted his greatest effort to the strengthening of the country’s military capabilities. We must celebrate the 75th anniversary of the founding of the Korean People’s Army as an all-people event that demonstrates the invincibility and bright future of the Songun revolution.

Our revolution which started under the banner of the great Juche idea, Songun idea, has greeted a new historic phase. The present new era is a worthwhile era of ushering in an all-round efflorescence of national prosperity on the basis of the victories and success of the Songun revolution registered in the history of the nation. We have the great guiding ideology, invincible single-hearted unity and powerful war deterrent tempered in the flames of the Songun revolution. The present reality, in which all conditions for leaping higher and faster are created, demands that we launch the revolutionary advance more vigorously to achieve the high objectives of the building of a great, prosperous and powerful socialist nation.

“Usher in a great heyday of Songun Korea full of confidence in victory!”–this is a slogan we should hold in struggle and advance.

We should wage a dynamic offensive campaign to build a socialist economic power.

Building an economic power is an urgent demand of our revolution and social development at present times and a worthwhile and historic cause of perfecting the looks of a great, prosperous and powerful nation. We should concentrate national efforts on solving economic problems, so as to turn Songun Korea into a prospering people’s paradise.

The main task in the present general march is to direct primary effort to rapidly improving the people’s standard of living and at the same time to step up technical reconstruction to put our economy on a modern footing and display its potentials to the full.

We should brilliantly realize the noble intention and plan of our Party, which regards the improvement of the people’s standard of living as the supreme principle in its activities.

We should, as in the past, keep up farming as the great foundation of the country and make an epoch-making advance in solving the problem of food for the people. The officials and working people in the agricultural sector should fully discharge their responsibility and role as masters in implementing the Party’s policy on making a revolution in agriculture, and bend a dynamic effort to doing farm work on their own.

We should decisively improve the production of consumer goods by waging a revolution in light industry. We should run light-industry and local-industry factories at full capacity and steadily increase the variety and quality of consumer goods by tapping to the maximum the latent resources and potentials in all sectors of the national economy. We should ensure that the bases of stockbreeding, fish farming and production of primary seasoning built through much effort prove effective so that the people can enjoy their benefit. We should continuously improve distribution of commodities and service work as required by the intrinsic nature of a socialist society and thus evenly provide the people with essential consumer goods of high quality. The officials of all units should pay close attention to supply service work for their employees. The public health sector should implement the Party’s policy on public health to ensure that the people can enjoy more benefit of the socialist health care system.

Power, coal-mining and metal industries and rail transport, the four vanguards of the national economy, must take the lead in building an economic power. Bearing deep in mind a high sense of responsibility they have assumed in the building of an economic power, the officials in the power and coal-mining industries should decisively ease the strain on electricity and coal. The sector of metal industry should increase the production of iron and steel by consolidating its Juche character and accelerating technical reconstruction. The sector of rail transport should fully meet the ever-growing demand for transport through efficient organization and command and iron discipline and order. National efforts should be geared to bolstering up the four vanguard sectors with the whole country engaged in giving an active assistance to them.

With a foresight into the distant future of economic development, we should give priority to geological prospecting, develop energy and other resources under a long-range programme, and treasure and protect the country’s resources as best as we can. Mining, machine-building, chemical, building-materials and forestry sectors should make steady efforts to revitalize their production.

Monumental edifices and other major projects of the Songun era should be built on the quality-first principle as required by the new century. The building sector should observe technical regulations and apply standard building methods in construction, and make buildings formative and artistic.

Cities, including Pyongyang, and rural villages across the country should be built up as required by the Songun era and land administration should be undertaken efficiently, to turn the country into a socialist fairyland.

The Juche-oriented idea, theory and policy of our Party on the economy are a definite guideline in the construction of an economic power. We should solve all problems arising in improving the economic work and the people’s standard of living on the basis of our Party’s idea and theory on the economy, which reflect the requirements of the Songun era, the IT era.

We should run the economy by our own efforts, our own technology and our own resources with a determination that we must build a socialist paradise by ourselves. We should make the most of the solid foundations of production and potentials existing in all sectors of the national economy. We should smash the imperialists’ despicable schemes for sanctions and blockade by dint of strong self-respect and pluck.

Thoroughgoing implementation of the Party’s policy of attaching importance to science and technology is a sure guarantee for the construction of an economic power. Latest science and technology, combined with the great revolutionary ideas of our Party, will bring about startling changes. All sectors and units should put themselves on a modern footing by drawing on the latest science and technology. Scientists and technicians should develop the cutting-edge science and technology in a short span of time in the revolutionary spirit of soldiers and in their way of work, so as to definitely guarantee the building of a great, prosperous and powerful nation by means of science and technology. All sectors and units should bring science and technology close to production, and unfold a mass drive for technical innovation.

We should undertake technical upgrading of the national economy, production and management activities by the method of motivating competent scientists and technicians. Effort should be channelled to education, so as to train in a great number talented people who will shoulder the building of a great, prosperous and powerful nation.

Holding aloft the banner of Songun, we should continuously exert a great effort to strengthening the defence capabilities.

Songun is the life and soul of our country and people and the dignity of our nation. In the future, too, we must hold fast to the Juche-based Songun idea and line as an invariable guiding principle of the Party and the revolution. We must never forget the trying days when we had to defend the lifeline of socialist Korea with a do-or-die determination, and defend the achievements of the Songun revolution gained at the cost of blood.

The People’s Army that constitutes the key force in the independent defence capabilities should be steadily strengthened politically and ideologically, militarily and technically.

It is the pillar of the socialist military power and the strong vanguard for national prosperity.

It should make a sweeping turn in its efforts for combat readiness and efficiency this year marking the 75th anniversary of its founding, so as to continually brighten its glorious history and tradition as an elite revolutionary army that has won victory after victory under the command of the generals of Mt. Paektu.

The patriotic zeal and militant mettle of the People’s Army should be given full play in the place of the Party’s concern, the forefront of socialist economic construction. The men and officers of the People’s Army must give full scope to their revolutionary soldier spirit, the might of which has been tempered in the crucible of the Songun-based revolution, exalting their honour as the major driving force of the Songun-based revolution in the struggle for national prosperity and people’s welfare.

It is important to develop rock-solid our great army-people unity, the first of its kind in the world. The climate of people supporting the army and the latter helping the former and the oneness of army and people in terms of ideology and fighting spirit should be promoted. Constant importance should be attached to the military affairs so that all the people would acquire military knowledge and the entire country be turned into an impregnable fortress. Primary efforts should be concentrated on the development of munitions industry for steady consolidation of the material foundations of our military capabilities.

We should strengthen in every way the unity of revolutionary ranks in ideology and purpose, so as to demonstrate the might of our country as a political and ideological power.

The revolutionary leadership is the centre of unity, centre of leadership, and also the symbol of strength and dignity of Songun Korea. The whole Party, the entire army and all the people should loyally uphold the idea and guidance of the leadership, cherishing an unshakable spirit of defending their leader at all costs. They should all become ardent fighters, who trust and follow only their leader and share his idea, purpose and destiny on the road of arduous struggle for accomplishing the Juche-oriented revolutionary cause.

Socialist construction advances amidst sharp class struggle. We should deal a merciless blow to the enemy’s psychological warfare and their attempt for ideological and cultural infiltration aimed at undermining socialism of our own style from within. The revolutionary principle, the principle of the working class, should be strictly maintained in all fields of the revolution and construction.

The present stirring situation demands that a radical innovation be made in ideological education. We should get rid of formalism and stereotype in ideological work, to conduct all types of ideological work in a novel manner as required by the Songun era. Positive examples manifested among Party members and other working people should be found out and given wide publicity. Art and literary works, mass media and all other information and motivational means should be enlisted in aggressive ideological education.

A decisive guarantee for victory in this year’s campaign is in undertaking the organizational and political work and command in a revolutionary way, arousing the entire Party, the whole country and all the people to the general advance for the thriving country.

The Party should be strengthened, and the militant role of Party organizations enhanced continuously.

The entire Party should display to the full a strong sense of organization and discipline by which it moves as one in accordance with the ideas and intention of its leader.

Our Party is a party striving to build a great, prosperous and powerful nation, and a mother party that serves the people. All Party organizations, in line with the mission of our Party and its fighting objectives, should gear their work to bringing about radical innovations in economic work and improving the people’s standard of living.

To work miracles and make innovations in this year’s general advance, Party organizations at all levels should conduct the Three-Revolution Red Flag Movement as the work of Party committees and push ahead with the movement by motivating the working people’s organizations.

It is important to develop a higher sense of responsibility among the officials of economic institutions, including the Cabinet, and enhance their role in bringing about a fresh turn in the building of a great, prosperous and powerful socialist nation.

The Cabinet should carry on economic operation and management in a responsible manner with strategic insight in conformity with its important position and mission to steer the socialist economic construction.

This year’s general advance is calling on young people to make unprecedentedly heroic efforts and perform great feats.

They are masters of a great, prosperous and powerful nation of the future and the most vital combat unit in implementing the cause of the Party. Greeting the 80th anniversary of the formation of the Young Communist League of Korea, youth league organizations and young men and women should staunchly defend President Kim Il Sung’s achievements in the Korean youth movement and the traditions of the movement and add brilliance to their honour as a reserve force and a special detachment of the Supreme Commander.

The youth should volunteer to work at labour-consuming sectors including the construction site of the Paektusan Songun Youth Power Station to display their mettle and feats. They should render distinguished services for the Party and motherland to become youth heroes and patriotic youth praised by the people.

Organizations of trade union, agricultural workers’ union and women’s union should intensify ideological education of their members in line with the requirements of the developing reality and inspire them to the general march for the building of a great, prosperous and powerful nation.

The dawn of reunification is breaking on this land with over six-decade history of division.

Last year witnessed the demonstration of the vitality of the independent reunification movement and the might of the June 15 reunification era. Holding aloft the banner of the North-South Joint Declaration, and under the slogan of independent reunification, peace against war and great national unity, all the fellow countrymen unremittingly followed the road to national reunification, foiling the frantic anti-reunification moves towards war of bellicose forces within and without. Last year’s reality reaffirmed that the Korean people of the same stock are a dignified nation with a strong sense of national self-respect and no force on earth can check the current of national history advancing towards a great, prosperous and powerful reunified nation.

The three principles of national reunification–independence, peaceful reunification and great national unity–put forth by President Kim Il Sung, the Sun of the nation, are the immutable guideline in the cause of reunification, and it is the unshakeable will of Kim Jong Il to realize reunification in our generation true to the instructions of the President.

This year all the fellow countrymen should hold high the slogan, “Add brilliance to the June 15 reunification era by attaching importance to the nation, maintaining peace and achieving unity!”

The stand of attaching importance to the nation should be maintained steadfastly.

To attach importance to the nation is a basic stand and motto the Korean compatriots who are subjected to division and war by foreign forces should hold fast to. Neither outside forces nor ideal can be put before national interests. National demand and interests should be regarded as an absolute yardstick in dealing with all the affairs, and the principles of maintaining independence and giving priority to and defending the nation in the face of any pressure and blackmail of outsiders should be advocated. Inter-Korean relations and reunification movement should be developed in accordance with the ideal of “by our nation itself”. Proud of being a homogeneous nation with a 5,000-year-long history, all the Korean compatriots should preserve the Juche character and national identity and categorically reject the US interference in, and obstructive manoeuvres against, the internal affairs of the nation.

The banner of defending peace should be upheld.

Peace is a key to the reunification of the country and common prosperity of the nation. Today the United States is desperately clinging to war moves against the DPRK and the country’s reunification in an attempt to check the current trend on the Korean peninsula towards reunification by the Korean nation itself and realize its wild ambition for domination of the whole of Korea. Due to the vicious schemes of the United States, peace and security on the Korean peninsula are under grave threat.

To safeguard peace is a just patriotic undertaking to defend the land for the existence of the nation, and victory in this effort is in store for the Korean people who are ready to sacrifice themselves to the defending of national independence. The entire Korean people should turn out in the struggle for peace against war in order to smash the military pressure, war exercises and military buildup that threaten our nation. They should see through the US hegemonic and aggressive nature, and launch a dynamic campaign to drive the US occupation troops, the root cause of war, out of south Korea.

The entire nation should unite.

Unity is a way to national existence and prime mover of the cause of the country’s reunification. Koreans in the north, south and abroad should bring the atmosphere of reconciliation and unity to a crescendo under the banner of independent reunification, and further promote solidarity and alliance between different reunification movement organizations with the June 15 All-Korean Committee as the parent body.

Opposition to conservatives in south Korea is part of the effort for realizing great national unity and a decisive factor for the advance of society and reunification movement there. The “Grand National Party” and other reactionary conservatives are now making desperate efforts to realize their traitorous attempts and ambition for regaining of power with the help of the outside forces. Broad segments of the south Korean people desirous of independent and democratic society and the country’s reunification should realize a broad anti-conservative alliance and launch an energetic campaign on the occasion of this year’s “presidential elections” to decisively destroy the treacherous pro-US conservative forces.

The June 15 North-South Joint Declaration is a beacon of hope that has paved the way for national prosperity. All the Koreans in the north, south and abroad should strive to implement the joint declaration without letup in the face of any trials and difficulties, and smash every attempt to emasculate and obliterate it.

Songun politics is an all-powerful sword for national defence that has proved its invincible might and patriotic character in the practical struggle to shape the destiny of the nation. Cherishing the boundless national pride and self-respect in the present reality in which the national dignity is being demonstrated worldwide on the strength of Songun politics, all the fellow countrymen should staunchly support Songun politics.

All the fellow Koreans in the north, south and abroad should bring about a heyday of the cause of independent reunification by turning out as one in implementing the three tasks–attaching importance to the nation, defending peace and achieving unity–with confidence in and optimism about the rosy future of a reunified country.

The present trend of global situation shows that the strong-arm policy and high-handedness of the imperialists are doomed to failure and that the people’s struggle for independence can never be checked. We will remain faithful to the last to our historic mission in safeguarding global peace and security and advancing the cause of independence of humanity, and continue to intensify international solidarity with the progressive peoples under the ideals of independence, peace and friendship.

A great era of prosperity is smiling on our motherland.

Kim Il Sung’s Korea is a formidable socialist power that is dignified by a great idea, powerful with the single-hearted unity and ever-victorious with the strong military capabilities. No force can obstruct the vigorous advance of our army and people, who are endeavouring to bring earlier the day when they would enjoy happiness in socialist paradise with nothing to envy in the world.

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Luxuries for North’s elite keep on flowing

Monday, December 18th, 2006

Joong Ang Daily
12/19/2006

Despite United Nations sanctions aimed at preventing the North Korean government from buying luxury goods for its ruling class, government sources here said a North Korean trading company is still busy providing Kim Jong-il loyalists with their perquisites.

Tian Ming Trading Company, in the center of this former Portuguese enclave now with the same China-affiliated status as Hong Kong, says its main business line is carpets, and little more. Three office workers said there were no North Koreans at the company and that it has never traded with North Korea. The company’s president was out of town on business, they said.

But a source with close ties to the trading economy here said that Park Su-dok, a 53-year-old North Korean, is in Macao and obtained a visa as an employee of the company.

Another source said, “Tian Ming is a joint venture by North Korean and Hong Kong investors, and its main business is buying luxury goods from Hong Kong for shipment to North Korea.” He added that Tian Ming’s president, a Hong Kong resident, is buying luxury watches, gold products and expensive liquor at North Korea’s request, using a Hong Kong branch office for the purpose.

Other Macao government officials said 18 North Korean firms were registered in Macao as of late November, and 115 North Koreans carry Macao visas as employees. Twenty have become Macao citizens, they added.

Since Washington threatened to impose sanctions on Banco Delta Asia here, allegedly for helping North Korea launder cash from its alleged dubious business lines, some of those companies have shut down. Ten are still in limited operation, however, these government sources said.

Separately, a South Korean banker in Hong Kong told the Joong-Ang Ilbo that a North Korean businessman had visited him in an attempt to sell gold bars through one of the South Korean bank branches in Hong Kong.

The banker reportedly spurned the overture, although the transaction would not have violated any South Korean laws or regulations on North-South dealings. He said he simply did not want to get involved in such a deal given the international attention being paid to commercial dealings with North Korea. The banker suggested that the offer may have been a sign of the foreign currency problems North Korea is facing because of the UN sanctions and U.S. pressure on financial dealings with North Korea.

Banco Delta Asia has said that between 2003 and 2005, it had sold 9.2 tons of gold bars that it had purchased from the North, where gold production is estimated to be about 25 tons per year, mostly for export.

Wall Street Journal
12/18/2006
Gordon Fairlcough, p.A1

Close-Out Sale: North Korea’s Elite Shop While They Can

A North Korean businesswoman with heavy makeup and a bouffant hairdo studied herself in a mirror as she modeled fur-lined leather coats at a small store in [Dandong, China] this frigid northeast border city.

During a three-day excursion late last month, the woman also tried on shoes and looked at large-screen television sets before buying furniture and fresh fruit and heading home to Pyongyang, North Korea’s capital city.

The United Nations has called for a crackdown on luxury-goods shipments to North Korea as a way of pressuring the country to drop its atomic-weapons programs, which came under new fire after an October nuclear test.

If anything, the uncertainty about the flow of fancy goods appears to have whetted the appetites of some privileged North Koreans — whose impoverished country cultivates a Spartan socialist image.

In Dandong, North Koreans, many wearing lapel pins with a picture of North Korea’s founding dictator, Kim Il Sung, stroll through hotels and department stores. Signs are often written in Korean, with storekeepers advertising computers, karaoke machines and the erectile-dysfunction drugs Viagra and Cialis.

A few North Koreans have bought new cars at a Toyota dealership near the Dandong customs checkpoint, according to a salesman. One man paid about $50,000 in cash for a luxury sedan.

Gold is also gaining a following. Wang Xiaoju, a saleswoman at the jewelry counter at Xin Yi Bai Department Store, says North Korean women come in nearly every day, mostly to buy gold chains and other gold jewelry.

Women from the North also are frequent visitors to a riverfront spa, favoring milk baths and massages, according to staff there. A saleswoman at the Xin Yi Bai L’Oreal counter says North Koreans are regular customers. Among the big sellers: body sculpting cream for women who want to look thinner.

In the first 10 months of this year, Chinese exports of fur coats and fake furs to North Korea soared more than sevenfold from the year-earlier period, according to Chinese Customs figures. Exports of televisions and other consumer electronics were up 77%, while perfumes and cosmetics were up 10%.

Some North Koreans are even buying real estate in Dandong. One high-rise building, where three bedroom apartments go for nearly $100,000 each, has sweeping views of a decrepit North Korean village with crumbling cinder-block houses across the border. A North Korean buyer recently purchased one of the units with cash, according to the building’s sales agent.

“Life is quite comfortable” for senior party members, military officers and traders, who have prospered despite widespread shortages of food, fuel and medicine in North Korea, says Pak Yong Ho, a former high-ranking North Korean official who defected to South Korea two years ago.

North Korea’s Communist Party has long had overseas agents in Macau, Switzerland and elsewhere dedicated to maintaining supplies of luxuries for top military and government personnel, according to former North Korean officials. Their jobs, in the wake of the U.N. sanctions, could get much harder.

The U.N. so far has let individual countries decide which high-end products to block. Washington has barred U.S. companies from selling everything from iPods to Harley-Davidson motorcycles. But that move was largely symbolic, as there is very little direct trade between the U.S. and North Korea.

Japan, which has for decades been a source of luxuries for the North Korean ruling class, has banned exports of 24 fancy products from caviar and gems to watches and art.

But the key to whether the sanctions will work is in the hands of China, North Korea’s largest trading partner.

A steel-girder bridge here spans the Yalu River, connecting Dandong to the city of Sinuiju in North Korea. That has helped Dandong, whose name means “Red East,” become a popular shopping destination for North Koreans with money. It is unclear how much that will change because of the sanctions.

So far, China hasn’t disclosed what specific kinds of high-end exports — TVs or luxury automobiles, for instance — it will block. A Chinese foreign-ministry spokeswoman, Jiang Yu, has said the list “should not be allowed to impact normal trade transactions” between the socialist neighbors.

North Korean leader Kim Jong Il, whose own taste for expensive French cognac and other imported luxuries is well known, uses money and goods liberally in an effort to buy the loyalty of the elite, according to U.S. and South Korean officials. Some of these officials say that depriving the ruling class of its creature comforts could alienate them from Mr. Kim, long known as “Dear Leader.”

But many North Korea watchers and North Korean defectors doubt that the elite would revolt against Mr. Kim’s government, because their fates are so closely tied to his now. “Under this regime, the privileged have had a very good life,” says Kim Dok Hong, the second-highest North Korean official to defect. “If the regime collapses, the people they’ve mistreated will be looking for revenge.”

At the peak of the famine that killed more than a million North Koreans in the mid-1990s, Mr. Pak, the former government official, says his parents weren’t short of food. Their home had three refrigerators regularly replenished with imported provisions by the Communist Party. Mr. Pak uses a pseudonym to protect family members still in the North from government retribution.

“The elites have had more freedom to do their own business” since economic overhauls in 2002, says Yang Chang Seok, a senior official at South Korea’s Unification Ministry, which oversees relations with the North. “People have earned a lot of money from trading.”

These days in Pyongyang, members of the ruling class are ferried around in imported cars and live in well-appointed — and well-guarded — apartment complexes. Their children race around city parks on in-line skates and play American computer games.

Says Mr. Pak: “If you can afford to pay, there’s nothing you can’t get.”

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Local Agriculture Officials Prosecuted

Wednesday, December 6th, 2006

Daily NK
Shin Joo Hyun
12/6/2006

An unidentified official document of the North Korean government, which was released recently, showed that senior local agriculture officials were reprimanded for low productivity rates and fake production reports in early November.

After thorough inspection by the Korean Workers’ Party central committee, the officials were accused of reporting false figures of agricultural production and embezzlement of products. Those who got caught would be expelled from the party and prosecuted, according to the document.

Authenticity of the document will be verified by the prosecution of the local agriculture officials and appointment of succeeding heads of local agriculture policy. If the document turns out to be genuine, it means that this year’s food production in North Korea will be gravely low and there must be someone to take responsibility.

In 1997, at the peak of the March of Tribulation, the Central Party Secretary for Agriculture Seo Kwan Hee was publicly executed for ‘spy activities.’ The incident is supposed to be Kim Jong Il’s pretext for famine and failed agricultural policy, with Seo being a scapegoat.

At the public execution site, the Pyongyang Regional Court’s justice sentenced Seo to death for ‘working as an American spy for more than 30 years and deliberately failing the Party’s agricultural policy, such as implementing inappropriate seeds and so on.’

It was also pointed out that the recent prosecution of senior agriculture officials reflected North Korean bureaucrats’ widespread corruption.

In North Korea, fraud and bribery are common from the central party to local party committees. Thus, it is possible that the central party inspection squad might have methodically already investigated personal corruption cases of the officials.

Defining embezzlement of agricultural products as felony represents the North Korean authority’s fear of possible famine. However, it is suspected that while most of the officials are corrupted, only agriculture bureaucrats are punished in order to throw the blame of the forthcoming food shortage on them; the expulsion of provincial agriculture officials of Hwanghae, Pyongan, and Hamkyong provinces from the KWP and their prosecution is intended to create scapegoats for Kim Jong Il in case of another horrible famine.

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“Defeat of the Military Spirit is Greater Hardship Than Economic Poverty”

Tuesday, November 28th, 2006

Daily NK
Park Hyun Min
11/28/2006

In its editorial on the 27th, the Rodong Shinmun, North Korea’s state newspaper, strongly encouraged the populace on the integrity of Military First policy.

This newsgroup argued “Our invincible revolutionary army will first of all make our country flourish in riches” and “Though many countries have perished because of a weak army, no country has ever collapsed because of starvation.”

This claim has risen amid expectation made by the WFP following North Korea’s nuclear experiment, which predicted that as international sanctions intensify and North Korea exhausts all its autumn harvest in which it is currently living off, by next year April, the country will be hit by sever starvation.

The newsgroup stated “We earnestly hope for prosperity and putting all things aside, it is blatantly obvious that we need to take deterrent forces” and strongly justifying indirectly the nuclear experiment. “Accomplishing prosperity another countries’ way is stupid fantasy. Our revolutionary army is national sovereignty and our military-first spirit is autonomy. This is a historical fact that cannot be changed.”

Further, the newsgroup stated “We are in a generation where today the nation’s economic power is influenced by developments made in national defense” and emphasized “The construction of national defense will soon be economic construction and the power of national defense will soon be economic power. Prioritizing and putting the development of our national defense first is the best way in developing our economy.”

Further claims were made “The greatest tragedy to our nation is not economic obstacles or poverty in a materialistic lifestyle but the defeat of our mind.” This is propaganda as a result of a recent situation for “anti-socialism” that is arising within North Korea and attempts by the regime to control this commotion.

The newsgroup added “The fact that we were successful in conducting a cutting edge nuclear experiment with only our strength and our wisdom simply goes to show the potential of our technological advancement” and “while living at the beginning of a strong military period, supporting Kim Jong Il is the pride and fortune of our people.”

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Mass Protest Incident in Hoiryeong

Thursday, November 9th, 2006

From the Daily NK
11/9/2006

On Tuesday, a number of residents in Hoiryeong, North Hamkyong Province mass-protested in front of the Nammun (a south gate) market for “compensation of market refurbishment payment” and against the merger of Hoiryeong markets, according to a North Korean source.

The inside source told the Daily NK through a telephone interview that evening ,“From this morning, more than a hundred shopkeepers, their families and the residents of Nammun district rushed to the market management office to request compensation of market refurbishment fees and repeal of Nammun market closure.”

The informant said that the mass protested against the local government because they were stirred by the authority’s decision. It is extremely exceptional that such a mass protest occurs in North Korean society.

They formed lines to present their opinions and in the meantime, some traders shouted phrases such as “Refund the refurbishment payments!” The primitive type of protest in North Korea, in which any kind of private mass activities are forbidden, means much more than western societies’ demonstrations. “No one particularly led the incident,” the informer testified, “but outraged merchants poured into the management office as a group.”
Security officers forcefully dispersed the protestors and crowd.

He added that Hoiryeong local security officers, fearing a spreading of the protest, forcefully dispersed the protesters and crowd. And it was not clarified whether any of the protestors got arrested.

Nammun market is two kilometers southeast of Hoiryeong city, and a frequent place for shopping of food and other basic supplies by local residents.

The incident occurred when the market management officials started to remove the market.

The officials had been collecting three thousand NK won per trader as “refurbishment fees” since late October.

That morning, however, the market management office ordered all the markets in Hoiryeong to be combined with newly constructed Hoiryeong Market, which is located former Hoiryeong Southern middle school, unilaterally, and started to remove the shops in the Nammun market.

Shopkeepers of Nammun market, having been unaware of such a decision, could not accept the order, the informant told the Daily NK. And none of them was guaranteed with a spot at the new Hoiryeong Market; even if one was, there would be a lot of time and money to be spent before actually having a shop at the new market.

Those shopkeepers of the Nammun Market, waiting for the opening hour, saw the removal of their stands, and sought the management officials. When they found any official unavailable, an angry outburst came.
There was a violent clash among angry residents.

The stand-owners and their families went to the office and asked accountable senior officials for compensation, which they did not receive. One protestor reportedly shouted, “It is ridiculous to walk five kilometers (to the new Hoiryeong Market) to buy a piece of Tofu!”

It was informed that amid the protest there was a violent clash among angry residents. When a man watching the demonstration said it was meaningless to protest, shopkeepers assaulted him for collaborating with the officials.

As soon as an act of violence happened, tens of security officers came to the site and dispersed the protestors and bystanders. Meanwhile, traders vehemently resisted and abused the security guards.

The newly built Hoiryeong Market is constructed at the site of closed Hoiryeong Southern middle school with about 700 sale stands, which are one meter long and a half meter wide. A down payment of 200,000 NK won (US$690) and daily rental fee of 10 to 30 won are required for a stand. Black market exchange rate is over 3000 won per US dollar while official one is 140 per a dollar.

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