Distribution to Go in
Some Enterprises
Daily NK. 8/16/12 By
Kim Kwang Jin
Daily NK has learned
that workers in so-called 'self-sustaining' areas of the North Korean economy
are set to see their existing system of food distribution replaced by the
payment of additional wages.
A source from North
Hamkyung Province revealed the news on the 15th, saying, “According to a
Central Party policy that was conveyed to us on the 8th, the system of food
distribution for the workers in some factories and enterprises is going to be
abolished, and all distribution to them will then be made in the form of wages.
The system of distribution for those work units under the state plan will be
retained as-is, while only those units that are self-sustaining will move to a
system of wages only.”
“Those units that are
losing their food distribution system will receive big wage increases,” the
source added. “However, it seems that there will be differences from factory to
factory and even from job to job.”
North Korean
enterprises are divided into eight levels, ranging from level one to level
eight with a class of ‘special level’ enterprises as well. Each enterprise
receives this designation based on an assessment of things including its role
in the economy, productive capacity and size of workforce. Larger enterprises
all fall between ‘special level’ and 'level 3', and are affiliated with the
central authorities.
Those operating
outside production plans ordered by the center have had the authority to deal
with production and distribution autonomously since the 1970s. This
self-sustaining system was designed to provide an incentive to produce, but
also allowed the state to forgo responsibility for providing food and daily
necessities by passing it on to provincial level entities.
This includes smaller
light industrial enterprises with between 50 and approximately 500 employees
between level 4 and level 7, and some workers in larger enterprises who are
employed solely in the pursuit of tasks that are designed to earn money for the
factory itself.
The fact that only
'self-sustaining system' factories or individuals within larger enterprises
will move to this ‘all-wage system’ presents a threat to hopes of significant
reform in North Korea. Indeed, the plan appears only to strengthen measures
that first appeared as part of the July 1st Economic Management Reform Measure
in 2002.
One defector who
previously worked in one of North Korea’s ‘special level’ enterprises told
Daily NK, “Take away military factories and most workers in major state
enterprises, then the number of people working under the self-sustaining system
is not large. Looked at as a percentage of the total production of all North
Korean enterprises it cannot be more than 10% and it can’t be more than 20% of
all workers, either.”
The source further
reported that news of the measure is not impressing workers on the ground.
“I spoke to someone in
Onsung County, and he told me that they are reviewing a 600% pay rise to
replace food distribution. So, someone previously getting 2000 won would get
12,000 won, but that is still less than the price of 3kg of rice.”
Another problem facing
the new policy is the disharmony likely to be caused in enterprises where both
types of employee is present, meaning that some will get food distribution
while others will not.
North signs joint
economic zone deal with China
Korea Joongang Daily.
8/16/12 By Choi Hyung-kyu, Kim Hee-jin
Pyongyang and Beijing
reached a consensus to launch full-fledged development in joint economic zones,
viewed as an attempt at a market economy in that specific region.
The North’s official
Korean Central News Agency yesterday reported the result of the so-called
“meeting of the DPRK-China cooperation committee for the third joint
development of Hwanggumpyong and Rason districts,” where Jang Song-thaek, uncle
of North Korean leader Kim Jong-un, attended with his counterpart Chen Deming
of the Ministry of Commerce and other Chinese government officials.
There, the KCNA said
that both sides signed a deal called “Comprehensive Plan for Rason Economic Zone,”
a joint enterprise zone near the border of the two countries in which they will
carry out full-scale construction for a harbor and railroads.
Once construction is
completed, they will launch operation committees for various businesses, such
as tourism and agriculture. A project for directing electricity from China to
the region has already been prepared, state media reported.
“They reached an
agreement to arrange an environment for profitable investment that complies
with international standards and mutual interest,” the KCNA reported.
“They will encourage
local governments and companies to invest in these projects.”
China’s Commercial
Ministry Tuesday said that the two countries signed a four-part agreement:
adoption of market economy in the zones, government-led projects, allowing
private companies to develop the zones and striving for mutual interests
between the two countries.
They will basically
develop three districts, the Chinese ministry said, which are Hwanggumpyong,
the Rason Economic Zone and Wihwa Island, an island in the Yalu River.
The ministry said that
they will build telecommunications facilities and an office in the three
districts.
The joint venture
investment committee, a North Korea-China organization that dealt with the
economic zones, will be dissolved, the ministry said. Instead, new operation
committees will be launched in the three zones.
A source in Beijing
told the JoongAng Ilbo that after the meeting, both parties also reached a
decision to boost cooperation between local governments in China and North
Korea.
“After the meeting,
provincial governments in China signed contracts with the North over dividing
specific roles in developing Rason, Hwanggumpyong, and Wihwa Island more
efficiently,” the source said.
Under the contract,
Jilin Province in northeastern China will provide power and telecommunications
facilities to the Rason district, while Liaoning Province will construct roads
and attract foreign investors to Hwanggumpyong and Wihwa Island, the source said.
The North Hamgyong and North Pyongyang provincial governments will provide
labor in return.
So far, foreign
investors have been reluctant to put their money into North Korea’s two trade
zones, Rason and Hwanggumpyong, due to poor infrastructure and insufficient
government support.
Sources told the
JoongAng Ilbo that many Chinese and Russian companies suspended construction in
the Rason zone because of poorly paved roads and insufficient power supply.
Even if they invested
money in the region, the North Korean regime extorted their money.
A private Chinese
company called Xiyang Group has invested about 240 million yuan ($37.7
million), but the North Korean regime unilaterally breached the deal and
expelled investors from the zone. Xiyang Group’s money was not returned.
However, controversy
still remains over how they would adopt a market economy in the border region.
Sources say that
Beijing is insisting private ownership be guaranteed in the entire zone, but
Pyongyang wants to allow it in only part of the region. While Beijing tries to
attract private companies to the zone, Pyongyang wants more state-run Chinese
companies to come.
Speculation is rising
that Jang would possibly meet with President Hu Jintao during his six-day stay,
as part of efforts to normalize relations with China that have deteriorated
since the North’s long-range ballistic rocket launch in April.
“Given the current
situation in the North, Jang’s visit is apparently intended to resolve urgent
economic matters,” said Yang Xiyu, a senior research fellow at the China
Institute of International Studies.
“We need to focus on
any changes in Kim Jong-un’s new diplomacy from now on.”
Seoul approves
Christian charity group's visit to N. Korea
Yonhap News Agency.
8/16/12
SEOUL, Aug. 16
(Yonhap) -- A Christian relief organization will visit North Korea this week to
discuss humanitarian aid to the communist country, Seoul's Unification Ministry
said Thursday.
Three World Vision
officials including vice chairman Park Chang-bin will cross the border through
the Dorasan transit office in Paju on Friday and hold a one-day meeting in
Kaesong with a North Korean organization dealing with non-governmental aid, the
ministry said.
