North Korean Economy Watch

By Benjamin Katzeff Silberstein

Daily NK today carries a piece reporting on economic reforms to potentially come at the Korean Worker’s Party Congress coming up this year:

In terms of the possibility of declaring new economic reforms, the source explained he would announce reform measures that stay within the overall framework of socialism. Taking an extra step forward from the new economic management system’s ‘June 28 Measures,’ which pertained to agricultural policies, the pending package of reforms will include provisions authorizing individuals to directly manage factories. In practice, this would enable the state to collect more taxes from the donju [newly affluent middle class] by providing them with more freedom to make money.

Aspects of these changes are already underway in select locales. “In some regions, municipal People’s Committee business offices have been granting donju increased license to earn money,” he said. “Provided that people can offer up the initial 6,000 RMB fee and build their own factories with basic infrastructure such as sanitation facilities they are relatively uninhibited in their business operations.”

Hints at reforms like these were largely absent from Kim Jong-un’s New Year’s Address, I argued in an earlier post.

Read the full article:
Major organizational changes to be announced at Party Congress
Choi Song Min
Daily NK
2016-01-11

By Benjamin Katzeff Silberstein

The supposed hydrogen bomb test has come to dominate the news on North Korea over the past few days, for obvious reasons. Kim Jong-un’s New Year’s Address has naturally ended up in the shadow of the nuclear test, but it is worth going back for a closer look. Overall, it is a speech that appears to contain few major announcements or indications. Perhaps more surprising than what themes are there, are the themes that are absent.

Stephan Haggard pretty much sums up how economic matters are treated in the speech, as they often are in North Korean rhetoric on economics: “As usual, the economic components of the speech rely more on exhortation than any clear policy message, confusing results with the means of achieving them.”

That is, in much of the speech, Kim simply talks about what will be achieved but leaves out how to get there. Take the following paragraph, for example (my emphasis added):

The Cabinet and other state and economic organs should decisively improve their economic planning and guidance. Leading economic officials should fully equip themselves with Party policy, work out plans of the economic work in an innovative way and give a strong push to it on the principle of developing all the sectors at an exponential speed by relying on the inexhaustible creative strength of the working people and by dint of modern science and technology. They should accurately identify the main link in the whole chain of economic development and concentrate efforts on it while revitalizing the overall economy, especially when the conditions are not favourable and many difficulties arise. They should be proactive in organizing and launching the work of establishing on a full scale our style of economic management method which embodies the Juche idea, thus giving full play to its advantages and vitality.

And:

All the sectors of the national economy should set ambitious goals and maintain regular production by tapping every possible internal reserve and potentiality.

Those who are more savvy at reading between the lines and interpreting rhetorical symbolisms can perhaps draw out meaningful signals from quotes such as these. But at face-value, they seem to give little indication of policy changes. Or of any policy at all, for that matter.

What are the areas that Kim hold up as economic priorities, then? Stephan Haggard points out heavy industry as one such theme. It is also the one mentioned first in the speech. Infrastructure and power supply also features fairly prominently (and is mentioned early on), with specific references to several power station construction projects. Kim also mentions IT and the “knowledge-driven economy” (emphasis added):

Our working class, scientists and technicians, true to the instructions of the great leaders, made a big stride in making the metallurgical industry Juche-based, built model, standard factories of the era of the knowledge-driven economy in various parts of the country and put production lines on a modern and IT footing, thus opening a new road of advance for developing the overall economy and improving the people’s standard of living.

Presumably, this is what North Korean media mean when they talk about the H-bomb test as an economic boost: that such capabilities show North Korea’s strength as a knowledge-based economy.

Domestic production capabilities are highlighted all the way through. This theme isn’t new. Kim Jong-un has often emphasized the importance of goods diversity and local production. This lies well in line with the basic economic tenets of the Juche doctrine. Here is one example of how domestic production capacity is highlighted in the speech (emphasis added):

The flames of the campaign to implement the Party’s ideas and defend its policies have unfolded a proud reality of our indigenous plane flying in the sky and our indigenous subway train running under the ground, and rich fish and fruit harvests were gathered, their socialist flavour bringing pleasure to the people.

One theme that features relatively prominently is construction. In one paragraph, Kim even states that “Construction is a yardstick and visual evidence for the strength of a country and the quality of its civilization”, and continues to urge the country to build more:

The construction sector should launch a general offensive to implement the Party’s construction policy and grand plan. By doing so, it should build important production facilities, educational and cultural institutions and dwelling houses on the highest possible level and at the fastest possible speed, so that they serve as standards and models of the times. In this way it can make sure that the great heyday of construction continues without letup.

Perhaps this is an indication that the building boom in Pyongyang of the past few years will continue. Priorities such as this one primarily benefit those political classes that live in Pyongyang. With few exceptions, as far as I’m aware, most other cities have seen little of the construction boom that the capital city has experienced.

There is also a reference to the coal mining industry. On the one hand, it may be interesting because North Korea’s main export destination for coal is China, and these trade flows have been volatile over the years, and there have been signs that North Korea isn’t getting a good deal in this trade. But on the other hand, this may be reading too much into one small reference in the speech (emphasis added):

In order to achieve breakthroughs for a turning point in building an economic giant the electric-power, coal-mining and metallurgical industries and the rail transport sector should advance dynamically in the vanguard of the general offensive.

Later, coal mining appears only in reference to the domestic power supply (emphasis added):

All sectors and all units should wage a vigorous campaign to economize on electricity and make effective use of it. The sector of coal-mining industry should raise the fierce flames of an upsurge in production to ensure enough supply of coal for the thermal power stations and several sectors of the national economy.

There are two themes that are surprisingly absent. One is agriculture. Agricultural policy is barely present, and when it is, management methods aren’t mentioned. For example:

The agricultural sector should actively adopt superior strains and scientific farming methods, speed up the comprehensive mechanization of the rural economy and take strict measures for each farming process, so as to carry out the cereals production plan without fail.

This is a little surprising, because regime sources have claimed that agricultural production has been boosted during the year, and management reforms with greater incentives for farmers have been touted as the reason. (A close look at the numbers indicates that agricultural production has declined slightly during 2015, moving it towards the average of the 2000s.) If agricultural reforms have indeed been a central tenet of Kim Jong-un’s economic policies, one could at least have expected a reference to these reforms in the speech.

The second theme that is strangely absent is forestry policy. It is only mentioned in one sentence:

The whole Party, the entire army and all the people should buckle down to the campaign to restore the forests of the country.

During the past year, Kim Jong-un has highlighted forestry policy as a key area. He has talked openly and frankly about the role of tree felling in causing floods and subsequent food shortages, and promoted reforestation, albeit not in a way that is likely to work very well. North Korean media has singled out tree nurseries for not doing their job properly. In sum, forestry has been relatively high on the agenda, but the topic still barely made it into the speech.

All in all, from an economic policy standpoint, this year’s New Year’s Address did not contain any major bombshells. The fact that economic issues appear right after the section on the upcoming party congress may be a hint that such issues will be high on the agenda, but then again, it might not mean much at all. Moreover, it is unclear how much can really read into the New Year’s Address for hints about regime policies and priorities. After all, the speech contained virtually no allusions to the H-bomb test that was to come only days later.

By Benjamin Katzeff Silberstein

Here is the English-language version of Kim Jong-un’s New Year’s Address, from KCNA:

Pyongyang, January 1 (KCNA) — Kim Jong Un, first secretary of the Workers’ Party of Korea, first chairman of the National Defence Commission of the DPRK and supreme commander of the Korean People’s Army, made his address on the New Year, Juche 105 (2016).

The full text of the address reads:

Dear comrades,

Filled with the dignity and self-respect of being victors, who have set up a shining milestone in the history of the glorious Workers’ Party of Korea and our country, we are greeting the New Year 2016.

In reflection of the fervent loyalty of all the people and service personnel, I extend the noblest respect and New Year greetings to the great Comrades Kim Il Sung and Kim Jong Il, the symbol of socialist Korea and the sun of Juche.

My New Year greetings also go to all the service personnel and people, who are working devotedly for the prosperity of their socialist country with a firm determination to follow the road of Juche to the end together with the Party, and I wish that all the families will be filled with harmonious feelings and the happy laughter of our dear children resound more loudly.

Seeing in the New Year, I extend greetings to our compatriots in the south and abroad who are struggling to achieve national reunification, the cherished desire of the nation, and to the progressive peoples and our friends in the world who aspire after independence, justice and peace.

The year 2015 was a year of gigantic struggle, which is adorned with meaningful events and eye-opening successes, a year of victory and glory, in which socialist Korea fully demonstrated its prestige and might.

Last year we celebrated the 70th anniversary of the founding of the Workers’ Party of Korea as a proud and significant revolutionary event of the great Paektusan nation.

Having turned out as one in hearty response to the Party’s call, the service personnel and people waged a heroic struggle in the revolutionary spirit of Paektu and through bold army-people cooperation, thus bringing about proud labour results dedicated to the motherly Party.

The Paektusan Hero Youth Power Station, Chongchongang Power Station in Tiers, Sci-Tech Complex, Mirae Scientists Street, Jangchon Vegetable Cooperative Farm and many other structures of lasting significance and beautiful socialist villages that embody the Party’s ideas and policies sprang up, showing the mettle of the country which is advancing by leaps and bounds reducing ten years to one.

Our working class, scientists and technicians, true to the instructions of the great leaders, made a big stride in making the metallurgical industry Juche-based, built model, standard factories of the era of the knowledge-driven economy in various parts of the country and put production lines on a modern and IT footing, thus opening a new road of advance for developing the overall economy and improving the people’s standard of living. The flames of the campaign to implement the Party’s ideas and defend its policies have unfolded a proud reality of our indigenous plane flying in the sky and our indigenous subway train running under the ground, and rich fish and fruit harvests were gathered, their socialist flavour bringing pleasure to the people. Our sportspeople including the trustworthy women’s soccer players exalted the honour of their motherland and further encouraged the militant spirit of our service personnel and people by winning gold medals in international competitions.

Through the large-scale events held to celebrate the Party’s 70th anniversary drawing the attention of the world, we demonstrated far and wide the might of the single-hearted unity of all the service personnel and people around the Party and the bright future of Juche Korea.

The moving scenes unfolded on the October celebration square shook the world with power greater than that of explosion of an atomic bomb or that of the launching of an earth satellite, and clearly showed that nothing can check the dynamic advance of our Party, service personnel and people that are fighting with the single-hearted unity and arms as their ever-victorious weapons.

Last year our service personnel and people warded off the danger of war facing their country and nation and safeguarded the dignity of the Republic and world peace with honour.

That we neutralized the hair-trigger situation teetering on the brink of armed conflict owing to the grave political and military provocations by the hostile forces and defended the dignity and security of our motherland from possible calamities is a brilliant victory born of the Herculean might of the great army-people unity and of the powerful Paektusan revolutionary army.

What makes us look back upon last year with greater delight is that our young vanguard who are reliably carrying forward the lineage of the Juche revolution and faith demonstrated the might of the youth power without parallel in the world by means of their loyalty to the Party and heroic struggle.

Educated and trained in the embrace of the great leaders and the Party, our young people rushed ahead along the course of the Korean revolution set by the Party, creating the charging spirit and culture of young people of the Songun era and performing laudable deeds that touched people’s heartstrings. The millions of young people, fully equipped with the revolutionary ideology of the great leaders and firmly rallied behind the Party, have grown strong in ideas and faith, to become successors to the cause of the Juche revolution. This is the greatest dignity, pride and success for us.

All the victories and successes achieved last year are a fruition born of the heroic struggle of our people, who turned out in the general offensive for their country’s prosperity with the spirit and mettle of Paektu, and a crystallization of the invaluable blood and sweat the service personnel and people dedicated to the country and the revolution.

Spending last year seething with creation and filled with miraculous achievements together with the service personnel and people, who were burning their hearts with patriotism and loyalty, our Party witnessed with a warm feeling their beautiful spiritual world and strenuous struggle and gained greater strength and courage from their trust-filled look and sincere opinions.

As there are the Party’s sagacious leadership, the invincible army and the great people that absolutely support the Party and defend it unto death, we have no difficulties to be afraid of and can accomplish any great cause without fail-this is the proud conclusion of last year’s struggle.

I extend warm thanks to all the members of the Workers’ Party of Korea, service personnel and people who glorified last year with heroic struggle and feats in devoted support of the cause of the Party cherishing ardent loyalty to it and faith in sure victory.

Comrades,

This year is a significant year when the Seventh Congress of the Workers’ Party of Korea is to be held.

The congress will proudly review the successes our Party has achieved in the revolution and construction under the wise guidance of the great leaders, and unfold an ambitious blueprint for hastening final victory for our revolution.

We should celebrate the Seventh Party Congress as a glorious meeting of victors as it will constitute a historic landmark in carrying out the cause of the Juche revolution.

“Let us usher in a golden age in building a thriving nation in this year when the Seventh Congress of the Workers’ Party of Korea is to be held!”-this is the militant slogan our Party and people should uphold as they advance.

All Party members, service personnel and other people should turn out as one with ardent loyalty to the Party and extraordinary patriotic zeal, and demonstrate the spirit and mettle of Korea that is rushing forward towards final victory racing against time.

We should concentrate all our efforts on building an economic giant to bring about a fresh turn in developing the country’s economy and improving the people’s standard of living.

In order to achieve breakthroughs for a turning point in building an economic giant the electric-power, coal-mining and metallurgical industries and the rail transport sector should advance dynamically in the vanguard of the general offensive.

The problem of electricity should be resolved as an undertaking involving the whole Party and the whole state. The existing power stations should be kept in a good state of maintenance, bolstered up and run at full capacity to ensure maximum output of electric power. The construction of the Tanchon Power Station and other projects for boosting the country’s power-generating capacity should be promoted along with the efforts to ease the strain on electricity supply by making proactive use of natural energy. All sectors and all units should wage a vigorous campaign to economize on electricity and make effective use of it. The sector of coal-mining industry should raise the fierce flames of an upsurge in production to ensure enough supply of coal for the thermal power stations and several sectors of the national economy.

The state should take thoroughgoing measures to make certain that the sector of metallurgical industry receives adequate material supplies and the metallurgical factories, such as the Kim Chaek and Hwanghae iron and steel complexes, expand the successes achieved in making their production Juche-based and modern. By doing so it can increase the output of iron and steel. The rail transport sector should establish rigid discipline and increase effectiveness in organizing and controlling transport services to ensure regular operation of trains, and step up the modernization of railways.

Our Party maintains the improvement of the people’s living conditions as the most important of the numerous state affairs.

The crop farming, animal husbandry and fishing sectors should make innovations to effect a radical change in improving the people’s standard of living. The agricultural sector should actively adopt superior strains and scientific farming methods, speed up the comprehensive mechanization of the rural economy and take strict measures for each farming process, so as to carry out the cereals production plan without fail. The animal husbandry and fishing sectors, which are waging an all-out struggle in response to the Party’s call, should ramp up production as soon as possible and see to it that the fish farms, vegetable greenhouses and mushroom production bases built across the country pay off. Thus they can contribute to enriching the people’s diet.

The light industry sector should put its factories and enterprises on a highly modern footing, provide them with plenty of raw and other materials to keep their production going full steam and increase the number of world-famous products and commodities with a competitive edge.

Construction is a yardstick and visual evidence for the strength of a country and the quality of its civilization; it constitutes a worthwhile, important undertaking for embodying our Party’s people-oriented policies. The construction sector should launch a general offensive to implement the Party’s construction policy and grand plan. By doing so, it should build important production facilities, educational and cultural institutions and dwelling houses on the highest possible level and at the fastest possible speed, so that they serve as standards and models of the times. In this way it can make sure that the great heyday of construction continues without letup.

All the sectors of the national economy should set ambitious goals and maintain regular production by tapping every possible internal reserve and potentiality. They should also take it as an important policy-oriented requirement to improve product quality, ensure domestic production of equipment and rely on locally available raw and other materials, and make strenuous efforts to this end.

The whole Party, the entire army and all the people should buckle down to the campaign to restore the forests of the country.

The urban and rural areas, workplaces and villages should be kept spick and span, and positive measures should be taken to conserve the resources of the country and prevent air, river and sea pollution.

Our Party is steadfast in its determination and will to solidify the foundations of a thriving country by dint of science and technology and, with them as the engine, achieve national prosperity. The scientific research sector should give priority to resolving the scientific and technological problems that arise in consolidating the might of the Juche-based industry, the socialist independent economy, and improving the people’s standard of living, and strive to push back the frontiers of science and technology. Factories, enterprises and cooperative farms should build science and technology diffusion rooms in a splendid fashion and put their operation on a regular basis, so as to ensure that all the working people learn modern science and technology. It is also necessary to establish a social climate of resolving the problems arising in reality on the strength of science and technology.

The Cabinet and other state and economic organs should decisively improve their economic planning and guidance. Leading economic officials should fully equip themselves with Party policy, work out plans of the economic work in an innovative way and give a strong push to it on the principle of developing all the sectors at an exponential speed by relying on the inexhaustible creative strength of the working people and by dint of modern science and technology. They should accurately identify the main link in the whole chain of economic development and concentrate efforts on it while revitalizing the overall economy, especially when the conditions are not favourable and many difficulties arise. They should be proactive in organizing and launching the work of establishing on a full scale our style of economic management method which embodies the Juche idea, thus giving full play to its advantages and vitality.

The political and military might of our Republic should be strengthened in every way.

It is necessary to cement the politico-ideological position of socialism rock-solid.

We should regard ideology as the driving force of the revolution and focus on the five-point education so as to train all the service personnel and people to be strong in ideas, to etch in their hearts the revolutionary spirit of Paektu, the spirit of the blizzards of Paektu, and encourage them to give free rein to their indomitable mental strength in the struggle to carry out the instructions of the great leaders and safeguard the Party’s policies. Political work and frontline-style information and motivational work should be vigorously conducted to ensure that the whole country seethes with an atmosphere of heightened political enthusiasm in the lead-up to the Seventh Party Congress.

Single-hearted unity is the great foundation and ever-victorious weapon for the Juche revolution. All the officials, Party members and other working people should connect their burning hearts with the garden of the offices of the Party Central Committee and share the Party’s ideas, breathe the same breath as it and keep pace with it in order to travel one road forever following the Party. Party organizations and state organs should give absolute priority to the demands and interests of the people by thoroughly applying the politics of prioritizing, respecting and loving them, and take responsible care of their political integrity and material and cultural life to the end. Party organizations should take hold of public sentiments, rally the broad sections of the masses closely around the Party, and launch an intensive struggle among officials against all practices of abuse of power, bureaucratism and corruption that gnaw at and undermine our single-hearted unity.

The country’s defence capability should be built up.

In this year, which marks the 20th anniversary of the movement of winning the title of O Jung Hup-led 7th Regiment initiated by General Kim Jong Il, the People’s Army should further develop itself into a revolutionary army of the Party in which the Party’s unified command system is thoroughly established, into a steadfast army of the Party that keeps the revolutionary faith to the death, and effect a turnaround in implementing the Party’s four-point line of building up the army to be formidable. By keeping it as the seed to conduct training in a real-war atmosphere and put it on a scientific and modern footing, the army should raise the fierce flames of training so that all the service personnel are prepared to be elite soldiers of modern warfare and stout fighters who are equipped with the military strategies and tactics of Kim Il Sung and Kim Jong Il, the heroic fighting spirit and flawless abilities to fight an actual war. It should become a standard-bearer and shock force of the times to make breakthroughs as intended by the Party on the major fronts where a thriving country is being built, and look for more tasks that are for the good of the people.

Officers and men of the Korean People’s Internal Security Forces should smash in embryo the manoeuvrings of the class enemy and hostile elements to harm the leadership of the revolution, our socialist system and our people’s lives and property, and members of the Worker-Peasant Red Guards and the Young Red Guards should intensify combat and political training and fully prepare themselves to defend their villages.

The munitions industry sector should develop defence science and technology, put the defence industry on a highly Juche-oriented, modern and scientific footing, and give full play to the revolutionary spirit of Kunja-ri, so as to develop and produce a greater number of various means of military strike of our own style that are capable of overwhelming the enemy.

We should ensure that our people enjoy the highest quality of civilization on the highest level.

By raising the flames of radical improvement in education in the new century, we should renovate the conditions and environment for education and improve its quality decisively, thereby bringing up talented personnel who are knowledgeable, morally sound and physically strong. We should improve medical treatment and preventive work as required by the socialist public health system in order to protect the people’s life and promote their health.

We should make sports mass-based and part of daily concern to ensure that the whole country is astir with enthusiasm for sports, and radically develop the specialized sporting techniques to create new miracles of heroic Korea in international games. The sector of art and literature should brace itself to produce a larger number of contemporary masterpieces which make all the service personnel and people burn their hearts with enthusiasm for the revolution and for struggle.

We should launch a strong drive to establish discipline with regard to moral ethics so as to ensure that a sound and civilized way of life prevails throughout the country.

All the officials and working people should turn out as one in the struggle to usher in a golden age in building a thriving nation in this year when the Seventh Party Congress is to be held.

It is the tradition of struggle and temperament of our people to turn out with a single mind and will and continuously work miracles like moving mountains and filling up seas if it is the Party’s call.

The heroic working class of Kim Il Sung and Kim Jong Il, as befits the core unit of the Juche revolution and the eldest son of the country, should support the Party’s ideas and cause in the vanguard and advance holding up the torch of a new great revolutionary upsurge in building an economic giant. Agricultural workers, with the sense of responsibility that they are in the trench on the first line of the forward echelon of the campaign to defend socialism, should strive to bring about a turn in agricultural production. Intellectuals should promote the building of a thriving country by means of brilliant scientific and technological successes as required by the era of the knowledge-based economy, and become pacesetters and standard-bearers in opening the efflorescence of civilization of the age of the Workers’ Party.

Our Party pins a great hope on the role of young people in today’s general advance. Young people, cherishing the trust of the Party that has given prominence to them as masters of the youth power, should train themselves further to be dependable pillars of the country and become artists of miracles and heroes on all the sites where a thriving nation is being built.

Officials should immerse themselves in the reality to inspire the masses and conduct every undertaking in a revolutionary and scientific way. They should also become true servants of the people and competent leading personnel of the revolution who make selfless, devoted efforts for the good of the people with the ennobling view of life that they have nothing more to wish for even though their bodies may be scattered like the grains of sand on the road for the good of the people.

In all fields of social life we should sustain the original features and great appearances of our society which is advancing on the strength of helping and leading one another forward and through a concerted effort. Our target is a Juche-oriented socialist power, and the might of socialism is none other than the might of collectivism. All sectors and all units should attach primary importance to the interests of the state, the Party and the revolution, introduce the successes and experiences gained by the leading units and make leaps and bounds in the flames of collectivist competition.

The principle of giving priority to self-development should be maintained in building a thriving socialist country. Worship of big countries and dependence on foreign forces is the road to national ruin; self-development alone is the road to sustaining the dignity of our country and our nation and to paving a broad avenue for the revolution and construction. With affection, trust, dignity and pride in everything of our own, we should achieve the great cause of building a thriving nation and realize the people’s beautiful dreams and ideals without fail by our own efforts, technology and resources.

National reunification is the most pressing and vital task facing the nation.

Last year, greeting the 70th anniversary of national liberation, we appealed to all the compatriots to pool their efforts to open up a broad avenue to independent reunification, and strived for its realization. However, the anti-reunification forces that are not desirous of national reunification and improved inter-Korean relations ran amuck to realize their schemes for a war and even created a touch-and-go situation short of crossfire, causing grave apprehension at home and abroad. The south Korean authorities publicly sought to realize their goal of “regime change” in our country and unilateral “unification of systems” against the trend of inter-Korean dialogue and detente, and fanned distrust and confrontation between the north and the south.

This year we should hold up the slogan “Let us frustrate the challenges by the anti-reunification forces within and without and usher in a new era of independent reunification!” and press on with the national reunification movement more vigorously.

We should reject foreign intervention and resolve the issues of inter-Korean relations and national reunification independently in keeping with the aspirations and demands of the nation.

It is none other than the outside forces that divided our nation, and it is also none other than the United States and its followers that obstruct the reunification of our country. Notwithstanding this, the south Korean authorities are clinging to a smear campaign against the fellow countrymen in collusion with the outside forces while touring foreign countries to ask for the solution of the internal issue of our nation, the issue of its reunification. This is a betrayal of the country and nation that leaves the destiny of the nation at the mercy of the outside forces and sells out its interests.

The issues of inter-Korean relations and national reunification should, to all intents and purposes, be resolved by the efforts of our nation in conformity with its independent will and demands, true to the principle of By Our Nation Itself. No one will or can bring our nation reunification.

The whole nation should struggle resolutely against the sycophantic and treacherous manoeuvres of the anti-reunification forces to cooperate with the outside forces. The south Korean authorities should discontinue such a humiliating act as going on a tour of foreign countries touting for cooperation in resolving the internal issues of the nation.

It is fundamental to realizing the country’s reunification to prevent the danger of war and safeguard peace and security in the Korean peninsula.

Today the peninsula has become the hottest spot in the world and a hotbed of nuclear war owing to the U.S. aggressive strategy for the domination of Asia and its reckless moves for a war against the DPRK. The U.S. and south Korean war maniacs are conducting large-scale military exercises aimed at a nuclear war against the DPRK one after another every year; this is precipitating a critical situation in the Korean peninsula and throwing serious obstacles in the way of improving inter-Korean relations. Last year’s August emergency showed that even a trifling, incidental conflict between the north and the south may spark a war and escalate into an all-out war.

The U.S. and south Korean authorities must discontinue their extremely dangerous aggressive war exercises and suspend acts of military provocation that aggravates tension in the Korean peninsula.

It is our consistent stand to strive with patience for peace in the peninsula and security in the region. However, if aggressors dare to provoke us, though to a slight degree, we will never tolerate it but respond resolutely with a merciless sacred war of justice, a great war for national reunification.

We should value such agreements common to the nation as the three principles for national reunification and declarations between the north and the south, and in conformity with them, open up an avenue to improved bilateral relations.

These principles and declarations constitute the great reunification programme common to the nation, and all fellow countrymen wish that they are implemented as soon as possible and a radical phase opened up in reunifying the country.

If they are sincere about improving inter-Korean relations and reunifying the country peacefully, the south Korean authorities must not seek pointless confrontation of systems, but make it clear that they intend to respect and implement with sincerity the three principles for national reunification, June 15 Joint Declaration and October 4 Declaration, which crystallize the general will of the nation and whose validity has been proved in practice. They should cherish the spirit of the agreement signed last year at the inter-Korean high-level emergency contact, and desist from any act that will lead to a breach of the agreement and mar the atmosphere of dialogue. In the future, too, we will make strenuous efforts to develop inter-Korean talks and improve bilateral relations. We will also have an open-minded discussion on the reunification issue, one of the national issues, with anyone who is truly desirous of national reconciliation and unity, peace and reunification.

All the Korean people in the north, in the south and abroad will smash all challenges and obstructive moves by the anti-reunification forces in and out of the country and build a dignified and prosperous reunified Korea on this land without fail under the banner of By Our Nation Itself.

The United States has persisted in ignoring our just demand for replacing the Armistice Agreement with a peace pact to remove the danger of war, ease tension and create a peaceful environment in the Korean peninsula. Instead, it has clung to its anachronistic policy hostile towards the DPRK, escalating the tension and egging its vassal forces on to stage a “human rights” racket against the country. However, no plots and schemes of the enemy could break the indomitable will of our service personnel and people to firmly defend and add brilliance to our style of people-centred socialism, the base of their happy life.

The challenges by the hostile forces remain uninterrupted and the situation is as tense as ever, but we will invariably advance along the road of independence, Songun and socialism under the unfurled red flag of the revolution, and make all responsible efforts to safeguard peace and security in the Korean peninsula and the rest of the world.

Our Party and the government of our Republic will further strengthen solidarity with the peoples of the world who are opposed to aggression and war, domination and subordination, and develop relations of friendship and cooperation with all the countries that respect our national sovereignty and are friendly to us.

The cause of Juche-oriented socialism is ever-victorious, and only victory and glory is in store for us who are advancing under the leadership of the Workers’ Party of Korea.

Let us all strive for the final victory of the revolution full of confidence in victory and optimism.

Greeting the hope-filled New Year, I wish the people across the country good health and happiness. -0-        (2016.01.01)

The source of this text is:
Korean Central News Agency
01-01-2016
KCNA

By Benjamin Katzeff Silberstein

Daily NK today carries a piece where interviewed North Koreans express their annoyance at how the hydrogen bomb test disturbed economic activity, and how it may get worse in the future:

News of the recent test has also angered people, with some openly criticizing the nuclear program and pointing out that money should go into providing for the people instead. “Market vendors don’t care if it’s an atom bomb or a hydrogen bomb. Most of them say they just want to make a lot of money and live a quiet life,” the source said.

A different source in North Pyongan Province reported that most people who watched the announcement out of curiosity were neither surprised nor interested, noting, “But market donju (newly affluent middle class) are worried that having blown up a massive ‘dollar bomb’, Kim Jong Un will now have a gaping hole in his coffers, making things busier for them since they’ll have to offer up more funds.”

“Loyalty funds had swelled because of the greater stability in the markets, so recently there weren’t a lot of purges of donju, but now with all the money that they’ve spent, it looks like donju will be under pressure or persecuted more to make up for the funds that went into the hydrogen bomb test,” he explained.

“After the first three nuclear tests, prominent donju were purged on ‘anti-socialist’ charges and their assets confiscated by the state. The leadership is likely to tighten its grip on donju again to make up for its expenses.”

Read the full article:
Nuclear test draws different set of concerns from North Koreans
Seol Song Ah and Choi Song Min
DailyNK
2016-01-08

By Benjamin Katzeff Silberstein

Today’s Rodong Sinmun carries an article hailing the (claimed) hydrogen bomb test as a step towards turning North Korea into an economic powerhouse, UPI reports:

Pyongyang’s state-controlled newspaper Rodong Sinmun published an article Friday that exalted North Korea’s military-first policy, stating, “The first successful hydrogen bomb test forcefully demonstrated the power of self-reliant [North Korea], [now] we must boldly struggle to build an economic powerhouse and to enhance the people’s livelihoods.”

North Korea stated the regime’s nuclear power has the capacity to strike “any strong enemy” and “seize absolute control.”

“A path has opened, where we can devote all our energies into building an economic powerhouse,” Pyongyang said in statement.

Read the full article:
North Korea hails hydrogen bomb test as path to economic power
Elizabeth Shim
UPI
2016-01-08

By Benjamin Katzeff Silberstein

Who decides what in Pyongyang? Do fierce political battles rage between hardliners and reformers, where the former group struggles to replace nuclear belligerence with liberal market economics and trade? Whenever a purge or suspicious death occurs in Pyongyang, speculations come alive about potential policy changes by the regime.

It is a fool’s errand to make guesses about how North Korea’s claimed (but unlikely) hydrogen bomb test fits into the speculative dichotomy of modernizers versus conservatives. After all, such simple divisions are rare in the political life of any country. But looking at the test in the context of the past year makes it clear that Pyongyang is pursuing a messy mix of policies that are mutually exclusive.

At the same time as one “hand” of the regime attempts to draw foreign investment, diversify its investor base to include other countries than China, and take its industrial zones from plans to reality, the other “hand” is actively working against economic progress by nuclear tests and diplomatic belligerence. Either the left hand doesn’t know what the right hand is doing, or it does, but just doesn’t want it to succeed.

Perhaps this is the way that Byungjin – Kim Jong-un’s strategy of parallel development of nuclear weapons and the economy – was intended to work. (If so, the regime seems to be dedicating much more resources and energy to the nuclear part, while the economic one still mostly consists of words.) In any case, Pyongyang is trying to achieve two goals at the same time, and it isn’t working.

For example, in 2013, the North Korean regime announced the creation of over ten special economic zones, with more added in both 2014 and 2015. Progress has been uneven. Still, the North Korean regime has continuously indicated that the zones are a priority and will continue to be improved. Just in November last year, new regulations were announced for the special economic zones. Visitors and analysts report that elite businesses have been doing better and better in North Korea, and that the economic environment has become increasingly freer.

Whatever the list of Pyongyang’s priorities may look like, January 6th was not a good day for those North Koreans tasked with planning, building and administering the country’s special economic zones and projects. North Korea is already an unlikely destination for most foreign investors. Many low-wage competitors already sit relatively close by the country, such as Vietnam and Cambodia. North Korea’s comparative advantages are really quite few. Things are already difficult and the claimed H-bomb test certainly won’t help.

The international sanctions are just one part of the problem. Even with knowledge of what the current sanctions regime permits investors to do, the test is a stark reminder that legal hurdles will keep being added as nuclear and missile tests continue. This should deter any investor without special connections, political motives or a financial death wish. Not to mention the terrible PR and public criticism that would follow any (at least western) company deciding to invest in North Korea.

And then, there is of course the China factor. Sure, Beijing doesn’t comply with sanctions the way it is obligated to do. Moreover, as the Choson Exchange blog points out, North Korean and Chinese businesses tend to find a way to get around the sanctions. Last but not least, to a large extent, Chinese investment and cooperation with North Korea is a regional issue, with much of it driven by the northeastern border regions that depend on trade and exchange with the country.

But this doesn’t mean that Beijing won’t ever take concrete action felt by Pyongyang. China’s worries about North Korea’s nuclear tests are arguably more warranted than those of any other country. Residents in Yanji, a Chinese city on the North Korean border, even felt tremors from the bomb test, and teachers and students were reportedly evacuated from schools near the border. A trend is only a trend until it is no more. At the very least, events like the nuclear test don’t exactly make Chinese officials more prone to want to facilitate economic cooperation and infrastructure investments for North Korea.

It’s almost painful to think of all those hours spent in the North Korean administration, drawing up plans for new economic development zones and projects, new laws for investments and other institutional changes to improve the economy, only to see their colleagues in another part of government work in the opposite direction. If (and this is a big “if”) there are indeed policy factions in the government, with modernizers and conservatives, the latter have scored a victory on January 6th, at the expense of the former.

UPDATE 2015-01-07: James Pearson and Ju-Min Park at Reuters have done a very interesting overview (with Michael Madden of NK Leadership Watch) of the people behind North Korea’s nuclear program. It’s an important illustration of the fact that interest groups are not just a thing of business, but also of politics and ideas. Read it here.

According to Yonhap:

The number of North Korean defectors to South Korea has halved since the launch of the Kim Jong-un regime, apparently attributable to the communist nation’s tougher border control, the Unification Ministry said Monday.

A total of 1,277 North Koreans entered South Korea via China and other countries in 2015, down 52.8 percent from 2,706 recorded in 2011.

Kim took the helm of the North in late 2011 soon after the death of his father Kim Jong-il.

The number of North Korean defectors settling in the South first topped 1,000 in 2001, and it had steadily increased to 2,914 in 2009.

But it has rapidly declined to 1,502 in 2012, 1,514 in 2014, and 1,397 in 2014, according to the ministry amid North Korea’s intensified crackdown on those attempting to flee the country.

The ratio of women has soared. More than 80 percent of the North Korean defectors who came to the South in 2015 were female.

Women, especially those working at markets, seem to be less subject to surveillance than men with regular jobs. It’s also easier for women to get jobs, like housekeeping, in China and to make money needed for coming to the South.

Read the full story here:
Number of N.K. defectors halves after Kim Jong-un assumes power
Yonhap
2016-1-4

According to Yonhap (via Korea Herald):

North Korea spent nearly a quarter of its gross domestic product on the military on average between 2002-2012, making the communist nation the world’s No. 1 in terms of military expenditures relative to its GDP, according to U.S. data.

According to the State Department’s World Military Expenditures and Arms Transfers 2015 report, the North’s military expenditures averaged about US$4 billion a year. That accounts for 23.8 percent of the country’s average GDP of $17 billion during the period.

Oman was a distant second on the list, spending 10.9 percent of its GDP on the military, followed by the African nation of Eritrea with 8.6 percent and Saudi Arabia with 8.2 percent. South Korea ranked 48th with 2.5 percent.

In absolute terms, however, the North’s annual military spending during the period ranked only 36th in the world, while South Korea’s ranked 11th, spending an average $26 billion. The U.S. was by far the world’s No. 1 with $656 billion a year on average, way ahead of runner-up China’s $88.5 billion.

In 2012 alone, the U.S. military expenditures amounted to $724, while China’s totaled $12.6. North Korea’s 2012 military spending came to $3.85 billion, while South Korea’s expenditures totaled $31.9 billion, according to the report.

North Korea also ranked first in the number of troops relative to population, with 1.17 million troops. The number also represented the third largest after China’s 2.21 million and the United States’ 1.41 million. South Korea ranked seventh with 679,000 troops.

The U.S. was by far the biggest arms exporter in the world, selling an average $102.4 billion worth of weapons to foreign countries a year during the period. Russia came next but trailed with only $6.8 billion worth of exports.

North Korea ranked 27th on the list, with $100 million of annual arms exports. But Pyongyang’s arms exports accounted for 10.2 percent of its total exports, making the country the No. 1 in terms of the proportion of weapons to total exports. (Yonhap)

Read the full story here:
North Korea spends quarter of GDP on military from 2002-2012: U.S. data
Yonhap (via Korea Herald)
2016-1-4

Institute for Far Eastern Studies (IFES)

In his 2016 New Year Speech, North Korean leader Kim Jong Un announced plans to build an economic powerhouse.

Kim frequently used expressions such as, ‘priority to self-development,’ ‘concentration of efforts,’ ‘whole Party’, and the ‘whole state’ that placed great emphasis on economic development and improvement of people’s livelihood.

Kim said “The principle of giving priority to self-development should be maintained in building a thriving socialist country [. . .] We should concentrate all our efforts on building an economic giant to bring about a fresh turn in developing the country’s economy and improving the people’s standard of living.”

Kim also stated that “In order to achieve breakthroughs for a turning point in building an economic giant the electric-power, coal-mining and metallurgical industries and the rail transport sector should advance dynamically in the vanguard of the general offensive.” Compared to the 2015 New Year speech, this can be seen as a relative increase in the emphasis placed on the industrial sector.

In particular, he emphasized resolving the power shortages, stating that “The problem of electricity should be resolved as an undertaking involving the whole Party and the whole state.” North Korea suffers from chronic power shortages, especially fuel, as well as decline in the hydroelectric power plant operations. In 2015, interrupted power supply was exacerbated by severe drought. Kim also said that “All sectors and all units should wage a vigorous campaign to economize on electricity and make effective use of it.”

In regards to improving agriculture, livestock, and fisheries sectors, he said that “The crop farming, animal husbandry and fishing sectors should make innovations to effect a radical change in improving the people’s standard of living. The agricultural sector should actively adopt superior strains and scientific farming methods, speed up the comprehensive mechanization of the rural economy and take strict measures for each farming process, so as to carry out the cereals production plan without fail. The animal husbandry and fishing sectors, which are waging an all-out struggle in response to the Party’s call, should ramp up production as soon as possible and see to it that the fish farms, vegetable greenhouses and mushroom production bases built across the country pay off. Thus they can contribute to enriching the people’s diet.”

Kim has made several onsite inspections to facilities in the light industry sector including cosmetics and shoes factories to encourage improvement in quality and domestic made goods. According to Kim, “The light industry sector should put its factories and enterprises on a highly modern footing, provide them with plenty of raw and other materials to keep their production going full steam and increase the number of world-famous products and commodities with a competitive edge.”

He stressed that “All the sectors of the national economy should set ambitious goals and maintain regular production by tapping every possible internal reserve and potentiality. They should also take it as an important policy-oriented requirement to improve product quality, ensure domestic production of equipment and rely on locally available raw and other materials, and make strenuous efforts to this end.”

He also encouraged the launch of the work to establish full-scale the ‘our style of economic management method’: “The Cabinet and other state and economic organs should decisively improve their economic planning and guidance, . . . [and] they should be proactive in organizing and launching the work of establishing on a full scale our style of economic management method which embodies the Juche idea, thus giving full play to its advantages and vitality.”

Institute for Far Eastern Studies (IFES)

The Choson Sinbo, a pro-North Korea newspaper of the General Association of Korean Residents in Japan, released an article on December 18 that evaluated North Korea in 2015 and commended it for “achieving a remarkable leap that reached 10 years achievement in just one year.”

The newspaper commented that many monumental works had been created in 2015 that changed the country. The newspaper also introduced the recently completed constructions of Mt. Paekdu Hero Youth Power Station, multi-tier power stations on the Chongchon River, Future Science Street, Mangyongdae School Children’s Palace, Pyongyang Nursing Home, Mansudae Fountain Park, and “Mujigae” ferry on the Taedong River.

In addition, the Sonbong region in Rason City which had suffered severe flood damages in August was reported to have achieved great changes in only 30 days, turning the village into a “socialist fairyland.”

The newspaper added that “this year, Choson [North Korea] embarked on the advancement of science and technology and emphasized ideology, weapons, and technology as three pillars for constructing great and powerful socialist nation.” It also stated that “in accordance with the party’s policy to turn all people into science and technology talents, institutions, factories, enterprises, and cooperative farms across the country were equipped with over 2,000 science and technology resource rooms.”

A corn processing plant and a catfish farm were discussed as examples: “Pyongyang corn processing plant has achieved automation, and dust and bacteria-free conditions in the entire production process, from raw material to the packaging stage”; “Pyongyang Catfish Farm established the comprehensive production system that integrated intellectualization, informatization, and magnetization in the factory.”

In particular, the newspaper mentioned North Korean leader Kim Jong Un’s onsite field guidance visit to the Pyongyang Catfish Farm where he emphasized the modernization of farm, noting that “the modernization of the catfish plant did not simply bring in power and technology from outside but is based on our independent technology and facilities.”

Moreover, the newspaper said, “This year, measures were devised to improve the dietary level of the people through focusing on advancing livestock, agricultural, and marine products.” It further announced that “Vegetable Science Institute of the Academy of Agricultural Science succeeded in cultivation methods of producing 300 tons per chongbo (1 chongbo = 9,917 square meters) through vigorous research that concentrated on scientification of greenhouse vegetable cultivation.”

In addition, the newspaper added that “scientification” was promoted in other sectors including education, sports, and culture.