Country Report North Korea February 2011

Economic policy: The State Price Bureau is upgraded to a commission

Fears of increased state control over the economy have been reinforced by a new measure. On January 13th the KCNA reported a new decree by the SPA presidium, to upgrade the State Price Bureau into the State Price Commission. The body's new title puts it on a par with, or even above, cabinet ministries. This reflects the perceived urgency of quelling inflation, which remains high in the wake of the 2009 currency reform. Yet the hope that stronger central command over prices will bring down inflation seems to indicate that the government may have learned the wrong lessons from the crisis.

Meanwhile, one of the underlying causes of inflation is the North's chronic failure to improve its production of food. On this front, the revelation, in a by-lined article that appeared in Rodong Sinmun in early January, that Ri Kyong-sik has returned as agriculture minister was notable. He succeeds Kim Chang-sik, who had held the post since early 2009 when he replaced Ri Kyong-sik, who in turn had replaced Kim Chang-sik in 2003. It is unclear what such musical chairs are meant to achieve, but they do not suggest that a new approach towards agriculture is in the offing.

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