North Korea's 6th Session of 10th Supreme People's Assembly
2003-04-25
North Korea's Sixth Session of the 10th Supreme People's Assembly
1. Overview
- Period and Venue of the Session: March 26, 2003 at Mansudae Assembly Hall in Pyongyang
- Participants: 574 out of the total 635 deputies were present. Among them were Kim Young-nam, Hong Seong-nam, Kim Il-cheol, Li Eul-seong, Yeon Hyeong-mook and Choe Tae-bok
- Agenda
a. Settlement of the 2002 budget execution and deliberation of the 2003 state budget. This was reported by finance minister Moon Il-bong
b. Approval of some bills adopted by the presidium while the Supreme People's Assembly was in adjournment.
- Proceedings: Opening address by the Speaker of the Supreme People's Assembly Choe Tae-bok, report by finance minister Moon Il-bong, discussion of agenda, approval of five bills and closing address by Speaker Choe.
2. Main Contents
(1) Report on the 2002 Budget Execution and Action on the 2003 State Budget
Settlement of the 2002 Budget
- Revenue: Receipt was 100.5 percent of the planned budget.
- Expenditure: Executed 99.8 percent of the planned budget.
- Settlement of Accounts: Achieved a surplus of 0.7 percent.
The economic development and social welfare expenditures occupied 22.7 percent and 14.9 percent, respectively, while the ratio for the military and management expenditures were not disclosed, along with the details about the economic development sector.
* The sector ratios to the 2001 budget. Economic development expenditure (42.3 percent), social welfare expenditure (38.1 percent), military expenditure (14.4 percent) and management expenditure (5.2 percent)
Deliberation of the 2003 Budget
- Revenue: 13.6 percent increase over the previous year
- In the current fiscal year, profits of state enterprises and of cooperative organizations would gain by 5 and 3.3 percent, respectively, over the previous year. Revenues from social insurance premium and land use would increase by 6.7 and 3.7 percent, respectively.
- Will issue "People's Livelihood Bond" to mobilize and use extra funds.
* This would mark North Korea's third bond issuance after the one issued immediately after the liberation in the 1940s and the Korean War. (Bonds constituted 5.7 percent of the financial revenue in 1950). Meanwhile, China had floated various bonds during 1950-58.
- Expenditure: 14.4 percent increase over the previous year.
- Spending on national defense is expected to increase by 15.4 percent. Data have been withheld about economic development and social welfare spendings
Ratio for military expenditures is known as 15.4 percent and the rest is withheld. Increase rates over the previous year are estimated to be as follows: electric power 12.8 percent, education 15.3 percent, coal industry over 30 percent, culture-arts 14.4 percent, agriculture 21.3 percent, public health 13.1 percent, light industry 12.4 percent, sports 6.6 percent, science-technology 15.7 percent and construction 18.5 percent.
(2) Approved some bills adopted by the presidium while the Supreme People's Assembly was in adjournment.
- Also approved were bills on military service, organizations, rivers, urban planning and accounting. Contents of the bills were withheld.
- The laws on rivers and urban planning were aimed at developing and managing rivers and cities in a systematic manner under the law on national land planning which was approved during the fifth SPA session last year.
- The accounting law was apparently designed to streamline the systems that resulted from an expanded application of the self-supporting accounting system and the introduction of the corporate accounting system in the wake of the launching of "Economic Management Improvement Measures" on July 1, 2002.
3. Analysis
- Unlike in previous sessions, the sixth session of the 10th Supreme People's Assembly skipped the prime minister's report on the cabinet's work for the previous year and on the new tasks for this year. It then acted on the previous year's budget and this year's, as well as other bills.
- This apparently indicated that North Korea was experiencing difficulties in mapping out concrete plans amidst uncertain prospects for this year and last year's poor performance despite the July economic reform measures.
- There was no change in the hierarchy of the head table from the previous year. However, the absence of military leadership, such as Kim Jong-il, Jo Myung-rok and Kim Young-choon, was conspicuous because they had attended every session of the 10th Supreme People's Assembly.
- The Outcome of Last Year's Budget Execution
- Despite the enormous budget demands prompted by the July economic reform measures, North Korea managed, on record at least, to realize a 0.7 percent budget surplus.
- The economic reform measures yielded virtually a meager result due to the failed delivery of goods caused by its nuclear issue and other political and economic factors. For this reason, North Korea could hardly afford to reveal a bigger financial picture, but settle for partial ratios.
- With regard to this year's budget, North Korea compiled an expanded budget as shown in the double-digit increases in the economic development, social welfare and military spendings.
0 In order to meet the rising budget demands, it will be inevitable for North Korea to experience growing budget deficits, even with the issuance of bonds and accelerated remittances from the pro-Pyongyang Korean resident organization in Japan.
