GoodFriends: Research Institute For North Korean Society

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North Korea Today No. 349 July 2010

[“Good Friends” aims to help the North Korean people from a humanistic point of view and publishes “North Korea Today” describing the way the North Korean people live as accurately as possible. We at Good Friends also hope to be a bridge between the North Korean people and the world.]
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Passport Issuing Procedure Simplified but still Complicated
Hoeryong Closes Down the Factories of No Operating Value Pursuant to May 26 Directives
How do Workers Respond to Deployment of Labor Force at Closing Factories to Special Labor Brigade?
Sariwon Threatens New Army Recruits, “Those who desert from army will be sent to a coal mine.”
Long Distance Bus Drivers Arrested for Transporting Drugs
[Table]
Price of Yuan and Rice in Chungjin, N. Hamgyong Province
[Investigative Report]
5.26 Party Directives, an Experiment to Improve Economic System

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Passport Issuing Procedure Simplified but still Complicated
After the 5.26 Party Directives, passport issuing procedures were to be simplified but residents do not see much change. Kim Gil-sun from Pyungsung spent 2,000 Chinese Yuan to get a passport in order to visit his relatives in China. He was very disappointed that even though he invested enormous sums of money it would take at least one year or up to three years. He has heard that with more residents facing poor living condition, the government has simplified passport issuing process so that people can visit their relatives in China and receive help from them. Nevertheless, there are still complicated procedures people have to go through to receive a passport. One of those procedures is attending a mandatory education class. The main topic of the class is “You should never make any contacts with South Koreans or try to find out about South Korea.” They warn that people will be severely punished when any contacts were made with South Koreans. They also teach to propagate about “constructing a Strong and Prosperous Nation by recognizing Chosun’s reality and uniting under one goal” when people see their relatives. They also recommend people to take Chinese money rather than merchandise when receiving assistance from their relatives. “The food situation is very tight but you can only bring up to 100 kgs of rice. However, there are no restrictions on Chinese currency so you can bring a lot.” Excessively expensive issuing fee, complicated procedure, and most importantly, long wait time are still challenges to overcome.

Hoeryong Closes Down the Factories of No Operating Value Pursuant to May 26 Directives
Pursuant to the May 26 Directives of the Department of Labor under the cabinet, Hoeryong City of North Hamgyong Province has decided to close down the factories and public enterprises of no operating value and to relocate the laborers. Hoeryong City has decided to find out the factories and public enterprises where the production had ceased completely because they do not have raw materials and supplies at all as well as examining the possibility of production. According to the respective officer, whether there are raw materials is the first thing to be reviewed and he said, “There are many factories that do not have any raw materials as the foreign trade was completely blocked, so the factories that do not have one month’s worth of supplies will be the first to be closed down.” The factories where the production has been completely suspended cannot pay the monthly wages of the laborers, so they do not have an operating value any more, according to him. It is decided to set aside the minimum amount of labors in the closing factories and to relocate most of the laborers into Urban Construction Team, Farm Construction Team, and Building Maintenance Facility of Hoeryong City. The plan is to deploy the laborers primarily in various construction projects processed as a part of the construction project of Mother Kim Jung-Sook’s hometown. Pursuant to this decision of the City Party, the related departments, such as the Department of Labor, have decided to process the assignment of the laborers from the closing factories to the Special Labor Brigade for construction. However, the assignment to the Special Labor Brigade is not as easy as it seems because various factors such as the conditions, ratings and duties of the laborers must be considered. People cannot be assigned to the Special Labor Brigade blindly without sorting out people like laborers who were not able to come to work because they do not have anything to eat and long-term patients. Accordingly, the City Party began to classify laborers since June 1st and is known to enter into a major labor disposition as soon as the classification process is finished.

How do Workers Respond to Deployment of Labor Force at Closing Factories to Special Labor Brigade?
After hearing the news that the labor force at factories to be closed will be deployed to the Special Labor Brigade, most of the workers are, in general, displeased. No one prefers to work for the Brigade because the food and other necessary supplies for the Brigade are not guaranteed and the labor is very intense. When the Brigade requests labor force to Public Enterprises, Public Enterprises have had a hard time finding the workers because many of their workers are unwilling to join the Brigade. Many try to avoid the Brigade even though each Enterprise promises to provide food and supplies for them. It is also very common for those who were pushed into working for the Brigade to return to their homes after working for a brief period of time.

In Hoeryong, a factory manager also pointed out similar problems. He says, “Why aren’t people joining the Special Labor Brigade? First of all, if people join the Brigade, the work intensity will be hard and the break time will be very limited. At a regular factory, if the work is finished, the workers can have various sideline jobs such as working in the patch farm or doing trading at the market. However, because the Brigade is controlled much like the military, it is impossible for the workers to engage in such activities. Second of all, the Brigade workers have to provide their own shoes, gloves, etc. If their shoes wear out, no one will provide new shoes for them. The same goes for clothes; there aren’t even any work clothes. Third of all, almost no workplace in the Brigade provides proper safety arrangements for the workers. Who would want to work for the Brigade when it is almost like a labor camp? Nobody!”

These are the current situations. Therefore, many people expressed a great concern about which factories will be totally closed and which factory should reduce the number of workers. Some of the workers are expressing doubts towards the fairness of the labor force re-arrangement. Kim HyunChul (alias) says that the officials will always forcefully drive away the workers who are on their black list. He is worried that the process of the re-arrangement will be at the officials’ discretion. The only people who will evade working for the Brigade are those with money or those who have maintained close relationships with the officials. It’s inevitable that those without power or money will be the ones to be assigned to the Brigade.

Sariwon Threatens New Army Recruits, “Those who desert from army will be sent to a coal mine.”
Sariwon City, North Hwanghae Province had the highest number of enlisted army deserters who could not endure hunger during new recruit training of the People’s Army Enlistment that began on April 7. Because 12 new recruits deserted within a week period and the numbers of deserters only increase, the Military Recruitment Division of the Ministry of People’s Armed Forced ordered Sariwon City Party to deploy the runaways to a hard sector. Accordingly, Sariwon City Party placed them at a coal mine. In principle, for those army deserters suffering from malnutrition the Military Recruitment Division is supposed to supply nutrition to them and bring them back to the base. However, due to the fact that there are too many runaways suffering from malnutrition the Military Recruitment Division is unable to take appropriate measures, so they can only resort to coercive measures to prevent desertion. The Ministry of People’s Armed Forces is also threatening that the deserters will be deployed to the most difficult and harshest places such as coal mines and mining sectors.

Long Distance Bus Drivers Arrested for Transporting Drugs
During the middle of May, many bus drivers were arrested by the police in ChungJin, North Hamgyong Province, for transporting drugs. A total of 22, including 14 long distance bus drivers and 8 bus conductors for the ChungJin, Onsung, and Hoeryong route, were arrested. On June 19, the police in Chungjin convened a drug-related meeting with the bus drivers, conductors and assistants. The police delivered a clear message to those who attended the meeting: “If the bus workers are arrested for drug transportation, they will be convicted of a felony and sent to the Labor Education Center, regardless of the amount of drugs involved.” Since last year, small-scale arrests have been made regarding drug transportations, but this is the first time that a large-scale involving 14 of the 17 long distance bus drivers were arrested. One policeman indicated the food shortage as a cause of the spreading of drug deals, by saying, “It’s not uncommon that the bus drivers were conspiring with drug dealers to transport drugs in order to make money. However, it seems that the number of secret drug deals have been increasing lately due to the rapidly deteriorating life conditions for the residents.”

[Table]
Price of Yuan and Rice in Chungjin


[Investigative Report]
5.26 Party Directives, an Experiment to Improve Economic System

On July 1, the price of rice and corn in Chungjin City, North Hamgyong Province, was 570 won and 350 won per 1 kg, respectively. The exchange rate was 142 won for 1 Yuan and 1,010 won for $1. Compared to the prices in April and May when rice was 400 won per kg and the exchange rate was 110 won per 1 yuan and 800-900 won for $1, it shows an ascending trend, but compared to the previous years' Spring Hardship Period, it is relatively stable. We have yet to see whether the ascent is going to get steeper or not. What are the most important factors that maintain the exchange rate and market prices relatively stable?

At first, it could be regarded as the effects of the 5.26 Party Directives. The directives stated, "The government will not be able to solve the food situation for the time being and each agency and enterprise should take care of the food supply on their own.'' With such directives it was anticipated that the price of staple grains and the exchange rate would skyrocket, but so far, there were only small scale increases. The major tenets of the directives are to lift all restrictions on markets and provide cash, a minimum of 150,000 won to a maximum of 600,000 won, to public enterprises. The directives ordered the closure of factories that suspended operations or have little prospect for productivity. The trading companies that were disbanded prior to the currency exchange and the military trading companies can resume trading as long as they can secure investment fund. Various trading restrictions were lifted. On June 7th, after the meeting of the Supreme People's Assembly, the central bank distributed 100 million won to municipal banks and 50 million won to county banks.

The directives are short-term measures to address the food crisis from June to August as well as the national economic crisis. As such, it appears to be an emergency measure. After the currency exchange measure, officials closed markets, banned trade and suspended foreign exchange activities. The effect was immediate paralysis of the North Korean economy. The restrictions on trading activity illustrated that North Korean society can no longer function without markets. Once the markets were closed, national and public enterprises, and even the national stores in Pyongyang had come to a stop and there were no movement of money and merchandise. As a result, from mid January, people began dying of hunger all over the country. North Korean authorities recognized the policy was a failure and sought to calm citizens by lifting market restrictions and reprimanding individuals responsible for the policies. "(For food supply) please be patient for three more months," officials said in an attempt to buy time, but three months elapsed and there was no economic recovery.

The 5.26 Party Directives appear to be an attempt not only to resolve food supply issues but also to revitalize the economy nationwide. It included instructions about the need to clarify the self-supporting accounting system. It instructed agencies and enterprises not to let laborers starve, and each enterprise should secure its own capital to pay wages and acquire resources. It provided cash to local banks in order to provide food and daily assistance. By adopting a series of measures the government abdicated responsibility for the socialist supply system, which is nominally surviving only in some core sectors and reduced the burden that the government must supply resources to public enterprises. In a way, it might be an aspect of strengthened self-supporting accounting system. It seems that they are even contemplating measures to either reduce the ration system with set prices or to discontinue it completely. Even if it's a stop-gap measure, it recognized the imbalance between the socialist supply system and a market system and placed more weight on the market economy.

Economic reform is necessary to encourage economic cooperation with foreign countries including China. It is inevitable that the North must implement internal reform to attract foreign investments in its eight cities. The North needs to demonstrate it is making every effort to improve its economy. If the reform experiments succeed despite its ad hoc nature, there would be no need to return to control-based socialist policies. It seems that officials will wait for the results of the experiments and then decide the direction of institutional restructuring. This is likely the reason why the authorities sent out the May 26 Directives to each unit quietly in contrast with the July 1 economic reform measures in 2002.

As the Party released money to provinces and enterprises and granted full responsibility to department unit managers, the success of this measure is dependent on the managers’ self-discipline and capability. Since they know this is a short-term emergency response, officials might siphon off the money that arrived in their hands without making any effort and just wait, doing nothing. However, if they take advantage of this opportunity and manage well until August, the current directives could lead to an institutional reform in the future.

However, it is doubtful that officials will work proactively and responsibly. To encourage their sense of responsibility, the authorities should regain their trust by guaranteeing security of the officials. In the past, the authorities controlled the wealthy private financiers by letting them grow for a certain period and then abruptly suffocating them with strict controls. Public managers and officials on the business front line remember cruel public executions of trade unit officials and private financiers starting in 2007. They might fear that they could lose their lives if they try to take the initiative for the new measure. Also, there is the usual pitfall of favoring family members and collective behaviors maximizing group interest.

If the reform measures of May 26 are to succeed, great leadership that guides each economic unit to survive through the market autonomy is necessary. Public officials and managers are the only ones who can assume that role. If they do not carry out the work, the nation might not be able to overcome this critical period until August or achieve economic recovery in the future. It appears that the government is trying to reshuffle the cabinet's authority which is traditionally responsible for economic recovery and convince the people that their efforts are sincere by changing the premier of the cabinet and appointing eight vice premiers. Concerns are arising as to how the new Choi Young Lim cabinet will navigate a new economic structure that will change in accordance with the May 26 directives.

3 comments:

Anonymous said...

HARDLINE COMMIE PIG TRASH!!! THEY GET WHAT THEY DESERVE !! LET THE PIG PEOPLE OF NORTH KOREA strarve and enjoy the terroritst regime they wanted so so desperately !!

Anonymous said...

Why do you have a section for comments? Don't you realise it just attracts ill-informed intolerant morons like this guy?

Anonymous said...

the first comment shows us one thing: ignorance. It is sad to see so much stupidity because of a lack of knowledge, something very simple to overcome. Simply read, inform your self about the world and then maybe you will have a chance to prove that you are not an ignorant decadent twat

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