Country Report North Korea February 2011

Economic policy: A new ten-year plan is proclaimed

The New Year editorial contained no hint of a major change that was announced a fortnight later, which must have been already in the works. On January 15th the Korean Central News Agency (KCNA, North Korea's official news agency) reported that the cabinet had adopted a ten-year State Strategy Plan for Economic Development, and that it would create a State General Bureau for Economic Development (SGBED) to implement it. The goals are vague, to say the least. The new plan's main emphasis will be on building infrastructure, developing agriculture and basic industries such as power generation, coal, oil and metallurgy, and promoting regional development. In terms of a time-scale, the new plan "helps lay a foundation for the country to emerge a thriving nation in 2012 and opens a bright prospect for the country to proudly rank itself among the advanced countries in 2020".

These dates are significant. For several years North Korea has been proclaiming that it will create a "great and prosperous nation" (kangsong taeguk) by 2012, the centenary of Kim Il-sung's birth. That is plainly impossible. The new ten-year plan, despite a ritual nod to 2012, in effect moves the goalposts, making 2020 the focus instead. Intriguingly, the Korea Taepung International Investment Group (KTIIG) will be entrusted with the implementation of major projects under the plan. KTIIG was established about a year ago as a joint venture, also involving a "Korean resident in China", Pak Chol-su, and is closely linked to the State Development Bank (SDB), founded last March. The bank is under the control of the NDC, which outranks the cabinet. It is unclear whether the new SGBED supersedes, controls or even competes with the SDB; it could be a move by the civilian cabinet to reassert its authority over the economy.

© 2011 The Economist lntelligence Unit Ltd. All rights reserved
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