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North Korea Removes State-Ruled Prices

Posted January. 16, 2005 22:03,   


North Korea has partly abandoned its state plan and will carry out a factory and corporate reform by replacing its state-ruled prices with market prices.

Experts analyzed that concerning the commencement of the factory and corporate reform following the agricultural reform, North Korea is converting to a market-socialism from the traditional socialist planned economy.

According to multiple well-informed sources, North Korea has recently communicated contents of the factory and corporate reform, which may, if early, be introduced by next month, to related organizations such as the Public Prosecutor’s Office, which regulates irregular practices of factories and corporations and instructed not to restrict related activities.

Additionally, on January 14 at the factory and corporate accounting manager meeting held at provincial offices nationwide, it was announced that “economic management” reforms will be enforced and concrete details will be publicized later on.

According to informed sources, this reform will include the following: removal of state-ruled prices and introduction of company sales by market prices; removal of state planning in production and sales and entrust to corporate judgment; settlements through banks without exception and regular payments of taxes; autonomously decided piece rates by corporations.

Currently North Korea has maintained double prices for one object, a state-ruled price at the state-owned store and a market price at the market.

Informed sources have conveyed that the reform will be applied to not only small and middle-sized factories and corporations but also to large state enterprises.

One source said, “The government has decided to purchase products by market prices from such large scaled state enterprises as the Kimchaek Steel Mill.”

The education of scientists, engineers and laborers, and the development of new technology, which is currently undertaken by the government, will be entrusted to the factories and corporations.

Another source communicated, “They will let factories and corporations attract foreign capital and establish joint-venture companies or earn money by commerce according to their capabilities.”

Suk-Ho Shin zsh75@donga.com kyle@donga.com